INVESTVIEW, INC.
2017INVESTVIEW, INC.
2019 FORM 10-K ANNUAL REPORT
Table of Contents
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this report and the information incorporated by reference herein may contain "forward-looking statements" (as such term is defined in Section 27 A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended). These statements, which involve risks and uncertainties, reflect our current expectations, intentions, or strategies regarding our possible future results of operations, performance, and achievements. Forward-looking statements include, without limitation: statements regarding future products or product development; statements regarding future selling, general and administrative costs and research and development spending; statements regarding the future performance of our network marketing efforts; statements regarding our expectations regarding ongoing litigation; statements regarding international growth; and statements regarding future financial performance, results of operations, capital expenditures and sufficiency of capital resources to fund our operating requirements. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and applicable rules of the Securities and Exchange Commission and common law.
These forward-looking statements may be identified in this report and the information incorporated by reference by words such as "anticipate"CERTAIN STATEMENTS CONTAINED IN THIS REPORT AND THE INFORMATION INCORPORATED BY REFERENCE HEREIN MAY CONTAIN “FORWARD-LOOKING STATEMENTS.” THESE STATEMENTS, WHICH INVOLVE RISKS AND UNCERTAINTIES, REFLECT OUR CURRENT EXPECTATIONS, INTENTIONS, OR STRATEGIES REGARDING OUR POSSIBLE FUTURE RESULTS OF OPERATIONS, PERFORMANCE, AND ACHIEVEMENTS. FORWARD-LOOKING STATEMENTS INCLUDE, WITHOUT LIMITATION: STATEMENTS REGARDING FUTURE PRODUCTS OR PRODUCT DEVELOPMENT; STATEMENTS REGARDING FUTURE SELLING, GENERAL AND ADMINISTRATIVE COSTS AND RESEARCH AND DEVELOPMENT SPENDING; STATEMENTS REGARDING THE FUTURE PERFORMANCE OF OUR NETWORK MARKETING EFFORTS; STATEMENTS REGARDING OUR EXPECTATIONS REGARDING ONGOING LITIGATION; STATEMENTS REGARDING INTERNATIONAL GROWTH; AND STATEMENTS REGARDING FUTURE FINANCIAL PERFORMANCE, RESULTS OF OPERATIONS, CAPITAL EXPENDITURES AND SUFFICIENCY OF CAPITAL RESOURCES TO FUND OUR OPERATING REQUIREMENTS.
THESE FORWARD-LOOKING STATEMENTS MAY BE IDENTIFIED IN THIS REPORT AND THE INFORMATION INCORPORATED BY REFERENCE BY WORDS SUCH AS “ANTICIPATE”, "believe"“BELIEVE”, "could"“COULD”, "estimate"“ESTIMATE”, "expect"“EXPECT”, "intend"“INTEND”, "plan"“PLAN”, "predict"“PREDICT”, "project"“PROJECT”, "should" and similar terms and expressions, including references to assumptions and strategies. These statements reflect our current beliefs and are based on information currently available to us. Accordingly, these statements are subject to certain risks, uncertainties, and contingencies, which could cause our actual results, performance, or achievements to differ materially from those expressed in, or implied by, such statements.“SHOULD” AND SIMILAR TERMS AND EXPRESSIONS, INCLUDING REFERENCES TO ASSUMPTIONS AND STRATEGIES. THESE STATEMENTS REFLECT OUR CURRENT BELIEFS AND ARE BASED ON INFORMATION CURRENTLY AVAILABLE TO US. ACCORDINGLY, THESE STATEMENTS ARE SUBJECT TO CERTAIN RISKS, UNCERTAINTIES, AND CONTINGENCIES, WHICH COULD CAUSE OUR ACTUAL RESULTS, PERFORMANCE, OR ACHIEVEMENTS TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN, OR IMPLIED BY, SUCH STATEMENTS.
The following factors are among those that may cause actual results to differ materially from our forward-looking statements:
| ● | potential adverse effects on our business and stock price due to ineffective internal controls over financial reporting; |
| ● | inability to manage financial reporting and internal control systems and processes; |
| ● | inability to properly motivate and manage our independent distributors; |
| ● | inability to manage existing markets, open new international markets, or expand our operations; |
| ● | inability of new products to gain distributor or market acceptance; |
| ● | inability to execute our product launch process due to increased pressure on our supply chain, information systems, and management; |
| ● | inability to protect against |
| ● | international trade or foreign exchange restrictions, increased tariffs, and foreign currency exchange fluctuations; | |
| ● | deterioration of global economic conditions; |
| ● | inability to raise additional capital if needed; |
| ● | unfavorable publicity on our business or products; |
| ● | a finding that our direct selling program |
| ● | expensive and |
| ● | failure to comply with anti-corruption laws; |
| ● | inability to build and integrate our |
| ● | loss of, or inability to attract, key personnel; |
| ● | unexpected tax or other assessments relating to the activity of our independent distributors; | |
When considering these forward-looking statements, youinvestors should keep in mind the cautionary statements in this report and the documents incorporated by reference. Except as required by law, we have no obligation and do not undertake to update or revise any such forward-looking statements to reflect events or circumstances after the date of this report.
Corporate History
Investview, Inc. (the "Company" “Investview” or “INVU”) was incorporated on August 10, 2005January 30, 1946, under the laws of the Statestate of Utah as the Uintah Mountain Copper Mining Company. In January 2005, we changed domicile to Nevada asand changed our name to Voxpath Holding, Inc. OnIn September 16,of 2006, the Companywe merged The Retirement Solution Inc. through a Share Purchase Agreement into Voxpath Holding, Inc. and then changed itsour name to TheRetirementSolution.Com, Inc., on and in October 1, 2008 changed our name to Global Investor Services, Inc. and, before changing our name to Investview, Inc., on March 27, 2012 to Investview, Inc. The Company currently markets directly and through its marketing partners as well as online, certain investor products and services that provide financial and educational information to its prospective customers and to its subscribers.
In August 2014, the Company formed Vickrey Brown Investments, LLC, a limited liability company under the laws of California with 51% membership interests specializing in investment strategies which combine quantitative strategies, forensic accounting and volatility controls. At formation, the minority members paid an aggregate of $1,000 as equity contribution. The Company contributed $120,000 as equity contribution and is contingently obligated to issue 500,000 shares of common stock upon achieving certain milestones (as defined). Prior to all distributions, the Company is to receive 25% of all revenue generated until at which time the $120,000 equity contribution of the Company has been paid.
On December 4, 2014, the Company formed GGI Inc., a corporation organized under the laws of Delaware for the purchase certain assets including the source code and platform use for the development of an electronic marketplace to facilitate impact investing. On December 27, 2014, the Company exchanged 21% ownership of GGI Inc. for two employment agreements. In connection with the aforementioned exchange, the Company charged 21% of the fair value of the net assets distributed of $338,050 as employee compensation expense. On March 13, 2015, the Company sold GGI, Inc. in exchange for $1,147,500 cash, assumption of $579,452 of debt and return of an aggregate of 1,350,000 shares of the Company’s common stock previously issued to acquire CertusHoldings, Inc. (see Note 4).
On December 27, 2015, the Company entered into a Second Amended and Restated Operating Agreement whereby the Company surrendered its equity ownership in Vickrey Brown Investments LLC and transferred ownership of SAFE Management LLC (“Safe”) in exchange for 25% of all revenue generated by Vickrey Brown Investments, LLC until an aggregate of $120,000 has been paid and 30.6% of remaining and future revenue
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Investment Tools & Training, LLC ("ITT") and Razor Data Corp ("Razor"). All significant inter-company transactions and balances have been eliminated in consolidation.2012.
On March 31, 2017, the Companywe entered into a Contribution Agreement with the members of Wealth Generators, LCC,LLC, a limited liability company (“Wealth Generators”), pursuant to which the Wealth Generators Members agreed to contribute 100% of the outstanding securities of Wealth Generators in exchange for an aggregate of 1,358,670,942 shares of theour common stock of the Company. Thestock. This closing of the Wealth Generators Contribution occurred after close of business on March 31, 2017, therefore, effective April 1, 2017, Wealth Generators became our wholly owned subsidiary.
On June 6, 2017, we entered into an Acquisition Agreement with Market Trend Strategies, LLC, a company whose members are also former members of our management. Under the Acquisition Agreement, we spun-off our operations that existed prior to the merger with Wealth Generators and sold the intangible assets used in those pre-merger operations in exchange for Market Trend Strategies’ assumption of $419,139 in pre-merger liabilities.
On February 28, 2018, we filed a name change for Wealth Generators LLC to Kuvera LLC (“Kuvera”), this did not affect the company’s tax and federal identification.
On May 7, 2018, we established WealthGen Global, LLC as a Utah limited liability company and our wholly owned subsidiary.
On July 20, 2018, we entered into a Purchase Agreement with United Games Marketing LLC, a Utah limited liability company, to purchase its wholly owned subsidiaries United Games, LLC and United League, LLC for 50,000,000 shares of our common stock.
On November 12, 2018, we established Kuvera France, S.A.S. to handle sales of our financial education and research in the European Union.
On December 30, 2018, our wholly owned subsidiary ofS.A.F.E. Management, LLC received its registration and disclosure approval from the Company (see Note 13).National Futures Association. S.A.F.E. Management, LLC is now a New Jersey State Registered Investment Adviser, Commodities Trading Advisor, Commodity Pool Operator, and approved for over the counter FOREX advisory services.
Overview
Investview Inc. through itsOn January 17, 2019, we renamed our nonoperating wholly owned subsidiary Wealth Generators providesWealthGen Global, LLC to SAFETek, LLC, a Utah limited liability company.
Overview
We own a number of companies that each operate independently, but are accretive to one another. We are establishing a portfolio of wholly owned subsidiaries delivering leading-edge technologies, services, and research dedicated primarily to the individual consumer.
Through our wholly owned subsidiaries, we provide affordable access to financial education, current market research, and cutting-edge technology designedthat enables individuals to assist individuals in navigatingincrease and cultivate their own financial resources, enjoy life, and plan for the financial markets.future. The services include basic financial educational, expense and debt reduction tools, research, newsletter alerts, and live education rooms that include instruction on the subjects of equities, options, FOREX, ETF’sForex, ETFs, binary options, crowdfunding, and binary options. In addition,the emerging cryptocurrency market.
We seek to toolsprovide a completely transparent and unique experience specifically designed to enhance the financial knowledge and improve the overall well-being of individuals worldwide. Our goal is to invest in the education, research, Wealth Generators also includes education and technology applicationsessential to assist individuals in debt reduction, increased savings, budgetinghelping the financially motivated secure lasting and proper tax expense management.balanced success for today and the future.
Each product subscription includes a core set of tools/research along with the personal finance management suite providing an individual complete access to the information necessary to cultivate and manage theirhis or her financial situation. Wealth Generators offers fourWe offer packages available through a monthly subscription that can be cancelled at any time at the discretion of the customer. A unique component of the product marketing plan is the distribution method whereby all subscriptions are sold via current participating customers who choose to distribute and sell the services. The bonus plan participation is purely optional but enables individuals the ability to create an additional income stream to further support their personal financial goals and objectives.
Recent DevelopmentsWe recently entered the trade automation space with the launch of two new robo trading products offered to Kuvera subscribers through our wholly owned subsidiary, SAFE Management, which is a registered investment adviser. SAFE Management can make investments to the trading signals and research products of Kuvera; put and call options and alternative investments; and investments in privately held startups for the benefit of individuals who desire to participate in new venture startup opportunities.
Our Companies
Kuvera Entities
Our largest subsidiary is Kuvera LLC, which delivers financial education, technology, and research to individuals through a subscription-based model. Kuvera provides research, education, and investment tools designed to assist the self-directed investor in successfully navigating the financial markets. These services include research, trade alerts, and live trading rooms that include instruction in equities, options, FOREX, ETFs, binary options, crowdfunding, and cryptocurrency sector education. In addition to trading tools and research, we also offer full education and software applications to assist the individual in debt reduction, increased savings, budgeting, and proper tax management. Each product subscription includes a core set of trading tools/research along with the personal finance management suite to provide an individual with complete access to the information necessary to cultivate and manage his or her financial situation. Kuvera operations are located at our Salt Lake City, Utah headquarters location and its website address is kuveraglobal.com.
On March 31, 2017,Kuvera France S.A.S. is our entity in France that will distribute Kuvera products and services throughout the Company entered intoEuropean Union.
Kuvera and Kuvera France provide affordable access to financial education, current market research, and cutting-edge technology that enable individuals to increase and cultivate their own financial resources, enjoy life, and plan for the future. The services include basic financial educational, expense and debt reduction tools, research, newsletter alerts, and live education rooms that include instruction on the subjects of equities, options, Forex, ETFs, binary options, crowdfunding, and the emerging cryptocurrency market.
Each product subscription includes a Contribution Agreementcore set of tools/research along with the members of Wealth Generators, LCC,personal finance management suite providing an individual with complete access to the information necessary to cultivate and manage his or her financial situation. We offer packages available through a limited liability company (“Wealth Generators”), each of which are accredited investors (“Wealth Generators Members”) pursuant to whichmonthly subscription that can be cancelled at any time at the Wealth Generators Members agreed to contribute 100%discretion of the outstanding securities of Wealth Generators in exchange for an aggregate of 1,358,670,942 shares of our common stockcustomer. A unique component of the Company (the “Wealth Generators Contribution”). The closing of the Wealth Generators Contribution occurred on March 31, 2017. Considering that, following the contribution, the Wealth Generators Members control the majority of the Company’s outstanding common stock and the Company effectively succeeded its operations to Wealth Generators, it is considered the accounting acquirer in this reverse-merger transaction. A reverse-merger transaction is considered, and accounted for as, a capital transaction in substance; it is equivalent to the issuance of Wealth Generators securities for the Company’s net monetary assets accompanied by a recapitalization. Wealth Generatorsproduct marketing plan is the survivingdistribution method whereby all subscriptions are sold via current participating customers who choose to distribute and continuing entitysell the services. The bonus plan participation is purely optional but enables individuals to create an additional income stream to further support their personal financial goals and the historical financials following the reverse merger transaction will be those of Wealth Generators. objectives.
As a result of the Wealth Generators Contribution, the following Wealth Generators Members received shares of common stock of the Company as follows:
The Company is unaware of any arrangements, including any pledge, the operation of which may at a subsequent date result in a change in control of the Company.
On March 30, 2017, Nicholas Maturo and Louis Sagar resigned as directors of the Company. On March 31, 2017, the board appointed Ryan Smith as a director of the Company. In addition, Ryan Smith and Annette Raynor were appointed as Chief Executive Officer and Chief Operating Officer, respectively. Dr. Louro resigned as an executive officer and director on April 6, 2017. On June 6, 2017, Annette Raynor, Chief Operating Officer, and Chad Miller were appointed as directors of the Company.
On April 7, 2017, the Company replaced the former auditor Liggett & Webb PA by engaging Haynie & Company as its independent registered public accounting firm for the Company’s fiscal year ended March 31, 2017.
Our Mission
Our Mission is to improve the financial fitness of people all over the world, regardless of background or status.
Our Vision
We believe that adoption of our programs principles will allow the user to change their current financial condition.
The Products & Services
Our Philosophy
By enabling the marriage of technology and knowledge, we are able to deliver innovative solutions directly to individuals around the world. Education and information for personal financePersonal and general financial education isinstruction and information are largely overlooked in all levels of education. An on-goingongoing cycle of debt accumulation, inability to save, lack of planning, and inadequate knowledge on how to cultivate our “capital” is passed from generation to generation.
By creating easy access, focused tutorials, and step by stepstep-by-step planning, our education and technology tools provide individuals with the necessary information to understand the power of proper utilization of money along with the ability to design their own path toward financial fitness.
Our products generally fit under 3 categories:
Find
The Find portion of our package offers WG Money and DEDUCTR.
WG —Money is a financial education tool designed to help youindividuals eliminate debt and improve yourtheir personal financial behaviors. WG Money includes education by Ross Jardine, America’s Money Mentor and educator. The goal of Mr. Jardine’s videos and articles is to teach the user how to reduce debt, decrease spending, and FINDfind money the userhe did not know the userhe had. Money is comprised of four sections: Cash Flow Quick Start (11 videos and assignments for immediate changes); Debt Freedom System (digital version of The 60-Day Money Miracle by Ross Jardine, which includes 12 chapters and a road map to debt-free living); Financial Tips and Strategies (videos, assignments, and suggestions for major life purchases, including housing, schooling, marriage etc.); and Money Media, which contains additional articles addressing current financial market trends tips and tools.
There are four sections of WG Money:
Deductr—Deductr is a personal money management tool that Wealth Generators provideswe provide to all members through a partnership with Deductr. The Deductr personal finance manager allows its users to manage all of their personal finances from a single view. With this tool, the user can create and monitor yourhis or her budget and financial goals in a matter of minutes.
Deductr’s personal finance manager tool has eight features:
Tax Assistance - Deductr Pro also includes a tax assistance feature making it easy to maximize both common and lesser-known tax benefits. Deductr can help youindividuals capture, document, and organize the expenses related to running yourtheir business right on yourtheir phone.
Grow
The heart of the program is our Grow component which marries technology, market experience and research to deliver strategies direct to individuals in seconds. We have trade strategies that cover U.S. equities options and indices, FOREX and Binary Options.
FOREX
FxOnEFXOne is one of Wealth Generators’ most interactive Forex products. FxOnE—FXOne includes live Forex Binary Options Sessionsbinary options sessions with our market experts, as well as Forex newsletter alerts delivered right to youra mobile phone. FxOnEFXOne also offers unique strategies and in-depth Forex training.
Binary optionsOptions - FxOnE—FXOne binary options session leverage very short-term strategies that give youindividuals immediate results in a relatively shortsmall amount of time. Live sessions are often as shortquick as 15 minutes. The live session provides the user real timereal-time strategies wherethat the user can follow along directly withas the experts as they identify setups and provide commentary to theirhis or her activity. The user can then determine whether to take action.act on that information.
Newsletter alertsAlerts - FxOnE—FXOne gives the user the opportunity to follow market experts while maintaining complete control of theirhis or her money. With FxOnE'sFXOne Forex Alerts, our experts do the research and analysis and deliver that information to the user via email alerts. The alerts include entry criteria, exit parameters, and position adjustments. A lifetime of experience delivered right to your hands.
FxOnE Alert Tool - Wealth Generators created a convenience tool to help the user follow the alerts without having to stop what the user is doing. Our proprietary technology software allows the user to personalize the trade parameters and risk management so the user can participate even when not available.
TheFX AcceleratorCRYPTOone utilizes technology to monitor the Forex market, attempts to identify opportunities,—CRYPTOone offers a library of cryptocurrency resources as well as live education, analysis, and sends signals in real time. It utilizes proprietary software and algorithmic technology to track the most active currency pairsresearch in the Forexcryptocurrency market. The FX AcceleratorWith CRYPTOone, users can learn as little or as much as they would like about the cryptocurrency universe. CRYPTOone also provides digital alerts that identify cryptocurrency opportunities. Our experts do the research and analysis, and the customer decides if he or she wants to take action with the information. With just a few clicks, users can participate in the cryptocurrency market with minimal effort. CRYPTOone is the perfect way for someone to dip a higher volume strategy issuing 2 to 12 opportunities per day. The FX Accelerator employs a systematic arbitraging strategytoe or jump in all the way and uses extensive quantitative analysis of real-time price data to detect opportunities.start benefiting from the growing cryptocurrency universe.
TheFX Multiplier 2.0CRYPTO Mining Packages allows—We offer cryptocurrency mining packages that consist of computer/GPU hardware and operation and maintenance services to provide individuals access to cryptocurrency mining. Our mining hardware (hosting) facility is arranged through a contractual partnership and located in Romania. Each GPU processing card is specific to the userpackage purchased and is individually serial numbered, and the customer may request his or her hardware to be shipped to him or her at any time. There is no guarantee or estimate of mining output provided as mining conditions change constantly and cryptocurrency is subject to a partnumber of the Forex market asrisks associated with emerging markets. We believe our mining services, which are physically housed, monitored, and maintained in a liquidity provider, which isdedicated facility, eliminate variables associated with other mining services that are typically only available to institutions. Forex trading generally involves predicting the strength of one currency to another. The FX Multiplier 2.0; however, does not attempt to make market predictions, it simply relies on a performance based algorithm and artificial intelligence technology to strategically accumulate inventory. The FX Multiplier 2.0 is active at all times, strategically controlling inventory. It moves with the market, holding inventory of currency ahead of the market so when that supply is in demand, small profits can be achieved on the inventory.cloud-based.
EQUITY MARKETS
The goal of the Equity PackMarkets—Our equity market education with alerts is our core offering and brings the knowledge and expertise of individuals who have been involved in the market for years directly to the user. Our equity services are now included in every subscription service. Our market experts provide the financial technology, education, and research that allowsallow the user to make decisions concerning the user’shis or her money in the market. The user maintains complete control of the user’shis or her money by using an online brokerage of yourhis or her choosing. Most equity pack strategies require a margin account, and you willusers need at least level four options approval or higher.approval.
Portfolio Builder:StartupsWith Portfolio Builder, the user can decide which investment vehicles fit the user’s financials goals.Our Market Experts select, analyze, and review a wide field of commission free ExchangeTraded Funds enabling self-directed individuals an alternative to mutual funds.
WG —Startups provides an opportunity for the user to identify and participate in early stageearly-stage businesses that may have potential to grow quickly. Michael Markowski is Wealth Generator’s startupour Startups expert. He was named by Fortune Magazine as one of its 50 great investors. He has experience in finding extremely successful startups. With WG Startups, the user will receive newsletter alerts providing information about companies that Michael Markowski thinks could be potential winners. The user then decides which companies the user wants tocan participate in and adds themone of these companies by adding it to the crowd fundinghis or her personal crowd-funding portfolio.
WG University:Kuvera University Wealth Generators is—We are committed to providing “best in class” education across a variety of topics. WGKuvera University provides exclusive access to our market education library, live monthly webinars with our market expert's, in depthexperts, in-depth distributor training, personal development training, and much more.with ongoing additional content. After watching and studying the videos and materials in WGKuvera University, the user will have a foundation in the global financial markets, a deeper understanding of how to manage your finances effectively,effective financial management, and additional skills that will help the user’s entrepreneurial and professional endeavors. Kuvera University is included with all customer subscriptions to ensure an ever-increasing value to our monthly access price.
Continual expansion and enhancement to these services and their delivery is the key to the longevity of the program. With a continual focus to increase convenience through the use of technology and by offering a wide variety of market approaches, our products are designed to meet the needs of the passive, moderately active, and highly motivated self-directed investors.
S.A.F.E. Management
Keep
S.A.F.E. Management, LLC is a Registered Investment Adviser and Commodity Trading Adviser that has been established to deliver automated trading strategies to individuals who find they lack the time to trade for themselves. S.A.F.E. is committed to bringing innovative trade methodologies, strategies, and algorithms for all worldwide financial markets. S.A.F.E. Management is a state registered investment adviser and operations are located at our Eatontown, New Jersey corporate finance location and its website address is safeadvglobal.com.
The core componentUnited Entities
United League, LLC owns a number of proprietary technologies including FIREFAN, a social app for sports enthusiasts. Technologies created to support any of our Keep philosophycompanies are held under the United League structure.
United Games, LLC is the deductr softwaredistribution network for United League technologies. Since the acquisition of United Games in July of 2018, we are working to combine the distributors of Kuvera and its abilityUnited Games. This is an ongoing process that is not targeted for completion until the end of calendar year 2019.
SAFETek
SAFETek, LLC (formerly WealthGen Global, LLC) is a new addition that we are currently establishing for expansion plans in the high-speed processing computing space. SAFETek will deploy a large-scale processing operation that is used for any of the following intense processing activities: protein folding, CGI rendering, game streaming, machine and deep learning, mining, independent financial verification, and general high-speed computing. Key trending markets for data computation include Internet of Things, Smart Homes, smart cities, smart devices, artificial intelligence, blockchain technology, virtual reality, 3D animation, and health technology data to track and manage potential tax write-offs including automated mileage tracking in real-time. Fully deploying the capabilities of deductr, an individual can see their up to the minute potential tax write offs throughout the year. Tax season becomesname a painless submission of deductr reports versus the agonizing manual process of trying to calculate expenditures once per year.few.
Our PackagesVision
Each of our packages includes all three componentsWe envision an ongoing integration of the FIND * GROW * KEEP philosophy. The only change in package offerings is the type of financial researchlatest technologies with emerging needs to deliver leading edge products and education selected in the GROW portion.services worldwide.
Each of our product packages includes a ten day no questions asked return policy. Subscriptions can be cancelled at any time and are billed monthly.Distribution Method
Distribution Method
The Company uses a network marketing distributionWe use an affiliate model to sell itsour product subscriptions. A current customerAnyone with an interest can participate in the optionalour bonus plan, thatwhich rewards them for selling product subscriptions. We believe this component of our offering is extremely powerful as it provides:
provides an additional income stream for the customer who decides to become a distributor. Individuals are much more comfortable discussing financial matters with people they know. The network becomes a support system for the customers as they learn together and share their experiences. The affiliate distribution model, while powerful, requires strict policies and procedures to ensure the company’s presentation and messaging are accurate and compliant. An affiliate/distributor is not required to be a customer to sell our products.
Regulatory MattersCompetition
Various laws and regulations in the United States and other countries regulate network marketing, or direct selling. These laws and regulations exist at many levels of government in many different forms, including statutes, rules, regulations, judicial decisions, and administrative orders. Generally, the regulations are directed at: (i) ensuring that product sales ultimately are made to consumers and that advancement within a sales organization is based on product sales rather than on investments in the organization or on other criteria that are not related to sales; and (ii) preventing the use of deceptive or fraudulent practices that have sometimes been inappropriately associated with legitimate direct selling and network marketing activities. Network marketing regulations are inherently fact-based and often do not include "bright line" rules. Additionally, we are subject to the risk that the regulations, or a regulator's interpretation and enforcement of the regulations, could change.
Network marketing companies, and the industry in general, continue to experience significant media and public scrutiny in many countries. Several companies that use similar distribution methods to ours have been scrutinized and penalized in several markets where we operate. This scrutiny, along with the uncertainty of the laws and regulations pertaining to network marketing in many countries, can affect how a regulator or member of the public perceives our Company. We cannot predict the impact that this scrutiny may have on our business, the industry in general or our stock price.
Competition
The Company facesface competition for each of itsour product categories, but doesdo not have a similar competitor with the full suite of services offered. Each of the financial education products, alerts, tools, and newsletters face competition from similar product companies such as TheStreet.com, Motley’sThe Motley Fool, Jim Cramer, and similar subscription basedlike subscription-based financial research services. The personal money management education and tools face competition from free mobile apps designed for the same purpose although Investview’sour personal money management does not advertise or entice the user to refinance or secure new loans and is a pure management tool that serves the individual and not the advertiser. The company’sOur tax management tools and education have limited competition, and we have deployed Deductr Pro as our tool of choice. Unique to our company is not the individual product but the combined suite of products for one monthly subscription price, cancellable at any time by the user and distributed exclusively by the active members through the optional bonus plan for those who choose to sell the service to others.
We believe our competitive advantages include:
- One of the most generous bonus programs in the network marketing segment
- A management team with extensive experience in financial education and market strategy research/technology
- A young and motivated distributor base
- A large demographic that services all genders, race, religion, and nationalities
- A delivery platform enabling us to launch new products quickly and efficiently worldwide
| ● | a generous bonus program for independent affiliates; | |
| ● | a management team with extensive experience in financial education and market strategy research/technology; | |
| ● | a young and motivated distributor base; | |
| ● | a large demographic that services all genders, races, religions, and nationalities; and | |
| ● | a delivery platform enabling us to launch new products quickly and efficiently worldwide. |
Our competitive weaknesses include:
-include translation challenges as we continue international expansion
- and components of our distributor backend that are programmed by third party providersthird-party providers.
IntellectualProperty
The company’sOur success is predicated on the adoption of new and innovative technology, education, and research along with constantly improving convenience tools. The delivery of alerts and financial information through our platform provides various levels of automation that is programmed and designed by the companyus exclusively for our products.products and modified to enable the individual to initiate action on alerts they desire. We own the intellectual property for many of our products strategies and platform delivery mechanisms while we make other products available through licensed arrangements. In this way, we can continually offer a full suite of “best of breed” services to ensure our members are receiving the most value and leading-edge programs for their monthly subscription.
Expansion
We are in the process of expanding the business internationally. International planning and restructuring is taking place as a result of the recent name change to Kuvera. Our affiliated entity, WG LATAM S.A.S., which has been reestablished to Kuvera LATAM S.A.S., distributes tour products and services in Colombia and surrounding Latin American countries. International operations can be impacted by international regulations and economic conditions, although all are continuously monitored.
Government Regulation
We have historically positioned the Companycompany as a knowledge provider and educator whichthat seeks to augment a user’s informed decision-making process, rather than to act as a conductor of investment decisions or a representative of investment services. As such, most of our activities do not fall within the scope of securities industry regulation. We do not provide securities brokerage or investment advisory services. OurMost of our products and services also do not require that any representative distributing theour services of Investview conduct themselves as an investment advisor or broker. However, our subsidiary S.A.F.E. Management, LLC, recently received its registration and disclosure approval from the National Futures Association. S.A.F.E. Management, LLC is now a New Jersey State Registered Investment Adviser (“RIA”), Commodities Trading Advisor (“CTA”), and Commodity Pool Operator registered with the U.S. Commodity Futures Trading Commission (“CFTC”), and is approved by the CFTC for over the counter FOREX advisory services. As a New Jersey-registered RIA, we are required to comply with New Jersey’s laws and regulations governing the activities of investment advisers and the fees they can charge, as well as certain provisions of the Investment Adviser Act of 1940. As a CFTC registered CTA, Commodity Pool Operator, and FOREX adviser, we are required to comply with federal law and CFTC rules regulating those activities.
We have established these registrations and the advisory structure to offer automated trade execution, which is managed by S.A.F.E. Management, LLC, in fact encourage all representativesits capacity as an RIA, for equities and usersequity options and in its capacity as a CTA for commodities, futures, and OTC Forex. In addition, SAFE provides traditional advisory services for clients who do not wish to trade for themselves. Automation of trades is only available through S.A.F.E. Management. No additional approvals are required for any of our information servicescurrent business activities. The cost of maintaining this additional regulated entity could have a material adverse effect on our business and could subject us to seek unrelated investment professionals for securities related activities.regulatory enforcement actions.
We are subject to government regulation in connection with securities laws and regulations applicable to all publicly owned companies as well as laws and regulations applicable to businesses generally. We are also increasingly subject to governmentgovernmental regulation and legislation specifically targeting Internet companies, such as privacy regulations adopted at the local, state, national and international levels and taxes levied at the state level. Due to the increasing popularity and use of the Internet,internet, enforcement of existing laws, such as consumer protection regulations, in connection with Web-basedweb-based activities has become more aggressive, and it is expected that new laws and regulations will continue to be enacted at the local, state, national, and international levels. Such new legislation, alone or combined with increasingly aggressive enforcement of existing laws, could inhibit the growth in use of the Internet and decrease the acceptance of the Internet as a communications and commercial medium, which could in turn decrease the demand for our services or otherwise have a material adverse effect on our future operating performance and business.
Employees
As of March 31st, 2017, the Company has 22June 27, 2019, we had 32 employees.
Internet Address
Additional information concerning our business can be found on our Web sitewebsite atwww.investview.comfor the most up-to-date corporate financial information, presentation announcements, transcripts, and archives. Information regarding our products and services offered by our wholly owned subsidiary: Wealth Generatorssubsidiary, Kuvera LLC, may be found atwww.wealthgenerators.comwww.kuveraglobal.com. SAFE Management LLC services can be viewed atwww.safeadvglobal.com. Web site links provided in this report, although correct when published, may change in the future. We make available free of charge on our Web sitewebsite our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, as soon as reasonably practicable after we electronically file such material with or furnish it to the SEC.Securities and Exchange Commission.
ITEMItem 1A. RISK FACTORSRisk Factors
YouInvestors should carefully consider the following material risk factors as well as all other information set forth or referred to in this report before purchasing shares of our common stock. Investing in our common stock involves a high degree of risk. The Company believesWe believe all material risk factors have been presented below. If any of the following events or outcomes actually occurs, our business operating results and financial condition would likely suffer. As a result, the trading price of our common stock could decline, and youinvestors may lose all or part of the money you paid to purchase our common stock.
Risks Related to our Business Operations
We have a limited operating history and, therefore, there isa high an elevated risk of potential business failure unless we can overcome the various obstacles inherent to an early stage business.
We have only limited prior business operations. Because of our limited operating history, youinvestors may not have adequate information on which youthey can base an evaluation of our business and prospects. Investors should be aware of the difficulties, delays, and expenses normally encountered by an enterprise in its early stage, many of which are beyond our control, including unanticipated research and development expenses, employment costs, and administrative expenses. We cannot assure our investors that our proposed business plans as described herein will materialize or prove successful, or that we will be able to finalize development of our products or operate profitably.
We have incurred substantial operating losses since inception (August 1, 2005), and we may never achieve profitability.
From our inception on August 1, 2005, through March 31, 2017,2019, we have incurred cumulative losses of $98,868,122,$25,096,983, recorded net losses from operations of $852,371$5,011,036 for the year ended March 31, 2017,2019, and our cash balance on March 31, 20172019, was $3,550. However, effective April 1, 2017 in conjunction with a Contribution Agreement dated March 31, 2017, Wealth Generators, LLC became a wholly owned subsidiary of the Company through a reverse-merger and the Company effectively succeeded its operations to Wealth Generators. Additionally,$133,644. Accordingly, we disposed of certain of our assets pertaining to our previous operations on June 6, 2017. Accordingly, going forward the operations for the consolidated company will be those of Wealth Generators, LLC, although there can be no assurancecannot assure that we will achieve profitability in the immediate future or at all as a result of our reverse-merger.all.
Our independent auditors have expressed substantial doubt about our ability to continue as a going concern.
In their audit opinion issued in connection with our consolidated balance sheet as of March 31, 20172019, and our related consolidated statements of operations, deficiency in stockholders’ equity,deficit, and cash flows for the year ended March 31, 2017,2019, our auditors have expressed substantial doubt about our ability to continue as a going concern given our recurring net losses, negative cash flows from operations, and the limited amount of funds on our balance sheet. We have prepared our consolidated financial statements on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The consolidated financial statements do not include any adjustments that might be necessary should we be unable to continue in existence. This could make it more difficult to raise capital in the future.
We may not be able to manage our growth effectively, which could slow or prevent our ability to achieve profitability.
The ability to manage and operate our business as we execute our development and growth strategy will require effective planning. Significant rapid growth could strain our internal resources and delay or prevent our efforts to achieve profitability. We expect that our efforts to grow will place a significant strain on our personnel, management systems, infrastructure, and other resources. Our ability to manage future growth effectively will also require us to successfully attract, train, motivate, retain and manage new employees and continue to update and improve our operational, financial and management controls and procedures. If we do not manage our growth effectively, slower growth is likely to occur and thereby slowing or negating our ability to achieve and sustain profitability.
We may not be able to fully protect our proprietary rights and we may infringe the proprietary rights of others, which could result in costly litigation.
Our future success depends on our ability to protect and preserve the proprietary rights related to our products. We cannot assure you that we will be able to prevent third parties from using our intellectual property rights and technology without our authorization. The CompanyWe also reliesrely on trade secrets, common law trademark rights, and trademark registrations, as well as confidentiality and work for hire, development, assignment, and license agreements with employees, consultants, third partythird-party developers, licensees, and customers. Our protective measures for these intangible assets afford only limited protection and may be flawed or inadequate.
Policing unauthorized use of our technology is difficult and some foreign laws do not provide the same level of protection as U.S. laws. Litigation may be necessary in the future to enforce our intellectual property rights, to protect our trade secrets or patents that we may obtain, or to determine the validity and scope of the proprietary rights of others. Such litigation could result in substantial costs and diversion of resources and have a material adverse effect on our future operating results.
In recent years, there has been significant litigation in the United States involving patents and other intellectual property rights. In particular, there has been an increase in the filing of suits alleging infringement of intellectual property rights, which pressure defendants into entering settlement arrangements quickly to dispose of such suits, regardless of their merits. Other companies or individuals may allege that we infringe on their intellectual property rights. Litigation, particularly in the area of intellectual property rights, is costly and the outcome is inherently uncertain. In the event of an adverse result, we could be liable for substantial damages and we may be forced to discontinue our use of the subject matter in question or obtain a license to use those rights or develop non-infringing alternatives.
Our business could be negatively affected by any adverse economic developments in the securities markets and/or the economy in general.
We depend on the interest of individuals in obtaining financial information and securities trading strategies to assist them in making their own investment decisions. Significant downturns in the securities markets or in general economic and political conditions may cause individuals to be reluctant to make their own investment decisions and thus decrease the demand for our products.
Our business could be negatively affected by any improved economic developments in the securities markets and/or the economy in general.
We depend on the interest of individuals in obtaining financial information and securities trading strategies to assist them in making their own investment decisions. Significant upturns in the securities markets or in general economic and political conditions may cause individuals to be less proactive in seeking ways to improve the returns on their trading or investment decisions and, thus, decrease the demand for our products.
The CompanyWe may encounter risks relating to security or other system disruptions and failures that could reduce the attractiveness of itsour sites and that could harm itsour business.
Although the Company haswe have implemented various security mechanisms, itsour business is vulnerable to computer viruses, physical or electronic break-ins, and similar disruptions, which could lead to interruptions, delays, or loss of data. For instance, because a portion of itsour revenue is based on individuals using credit cards to purchase subscriptions over the Internet and a portion from advertisers whothat seek to encourage people to use the Internet to purchase goods or services, the Company’sour business could be adversely affected by these break-ins or disruptions. Additionally, itsour operations depend on itsour ability to protect systems against damage from fire, earthquakes, power loss, telecommunications failure, and other events beyond the Company’sour control. Moreover, the Company’sour website may experience slower response times or other problems for a variety of reasons, including hardware and communication line capacity restraints, software failures, or during significant increases in traffic when there have been important business or financial news stories and during the seasonal periods of peak SEC filing activity.stories. These strains on itsour systems could cause customer dissatisfaction and could discourage visitors from becoming paying subscribers. The Company’sOur websites could experience disruptions or interruptions in service due to the failure or delay in the transmission or receipt of information from Investview.com.us. These types of occurrences could cause users to perceive itsour website and technology solutions as not functioning properly and cause them to use other methods or services of itsour competitors. Any disruption resulting from these actions may harm the Company’sour business and may be very expensive to remedy, may not be fully covered by our insurance, and could damage itsour reputation, and discourage new and existing users from using itsour products and services. Any disruptions could increase costs and make profitability even more difficult to achieve.
The CompanyWe will need to introduce new products and services and enhance existing products and services to remain competitive.
Our future success depends in part on our ability to develop and enhance our products and services. In addition, the adoption of new Internet, networking or telecommunications technologies or other technological changes could require us to incur substantial expenditures to enhance or adapt our services or infrastructure. There are significant technical and financial costs and risks in the development of new or enhanced products and services, including the risk that we might be unable to effectively use new technologies, adapt our services to emerging industry standards, or develop, introduce and market enhanced or new products and services. An inability to develop new products and services, or enhance existing offerings, could have a material adverse effect on our profitability.
The Company reliesWe rely on external service providers to perform certain key functions.
We rely on a number of external service providers for certain key technology, processing, service, and support functions. External content providers provide us with crypto mining services, financial information, market news, charts, option and stock quotes, research reports, and other fundamental data that we offer to clients. These service providers face technological and operational risks of their own. Any significant failures by them, including improper use or disclosure of our confidential client, employee, or company information, could cause us to incur losses and could harm our reputation.
We cannot assure that any external service providers will be able to continue to provide these services in an efficient, cost-effective manner or that they will be able to adequately expand their services to meet our needs. An interruption in or the cessation of service by any external service provider as a result of systems failures, capacity constraints, financial constraints or problems, unanticipated trading market closures, or for any other reason, and our inability to make alternative arrangements in a smooth and timely manner, if at all, could have a material adverse effect on our business, results of operations, and financial condition.
The CompanyWe could face liability and other costs relating to storage and use of personal information about itsour users.
Users provide the Companyus with personal information, including credit card information,tax identification numbers, which it doeswe do not share without the user’s consent. Despite this policy of obtaining consent, however, if third persons were able to penetrate the Company’sour network security or otherwise misappropriate itsour users’ personal or credit card information, itwe could be subject to liability, including claims for unauthorized purchases with credit card information, impersonation or other similar fraud claims, and misuses of personal information, such as for unauthorized marketing purposes. New privacy legislation may further increase this type of liability. Furthermore, the Companywe could incur additional expenses if additional regulations regarding the use of personal information were introduced or if federal or state agencies were to investigate our privacy practices.
Legal uncertainties We do not store user credit card information and government regulationrely upon our merchant processing partners to collect and store this information with the necessary Payment Card Industry Security Standards compliance in place. However, a breach of the Internetmerchant’s security standards could adversely affect the Company’s business.create liability for us.
Many legal questions relatingOur business could be negatively affected if we are required to the Internet remain uncleardefend allegations of unfair competition and these areas of uncertainty may be resolvedunfair false or deceptive acts or practices in ways that damage the Company’s business. It may take years to determine whether and how existing laws governing matters such as intellectual property, privacy, libel and taxation apply to the Internet. In addition, new laws and regulations that apply directly to Internet communications, commerce and advertising are becoming more prevalent. As the use of the Internet grows, there may be calls for further regulation, such as more stringent consumer protection laws.
These possibilities could affect the Company’s business adversely in a number of ways. New regulations could make the Internet less attractive to users, resulting in slower growth in its use and acceptance than is expected. The Company may be affected indirectly by legislation that fundamentally alters the practicality or cost-effectiveness of utilizing the Internet, including the cost of transmitting over various forms of network architecture, such as telephone networks or cable systems, or the imposition of various forms of taxation on Internet-related activities. Complying with new regulations could result in additional cost to the Company, which could reduce its profit margins or leave it at risk of potentially costly legal action.
FTC Regulationsaffecting commerce.
Advertising and marketing of our products in the United States are also subject to regulation by the FTCFederal Trade Commission (“FTC”) under the Federal Trade Commission Act, or FTC Act. Among other things, the FTC Act prohibits unfair methods of competition and unfair falseorfalse or deceptive acts or practices in or affecting commerce. The FTC Act also makes it illegal to disseminate or cause to be disseminated any false advertisement. The FTC routinely reviews websites to identify questionable advertising claims and practices. Competitors sometimes inform the FTC when they believe other competitors are violating the FTC Act and consumers also notify the FTC of what they believe may be wrongful advertising. The FTC may initiate a non-publicnonpublic investigation that focuses on our advertising claims, which usually involves non-publicnonpublic, pre-lawsuit, extensive formal discovery. Such an investigation may be verylengthy and expensive to defend be lengthy, and result in a publicly disclosed Consent Decree, which is aconsent decree or settlement agreement. If no settlement can be reached, the FTC may start an administrative proceeding or a federal court lawsuit against us or our principal officers. The FTC often seeks to recover from the defendants, whether in a Consent Decreeconsent decree or a proceeding, any or all of the following: (i) consumer redress in the form of monetary relief or disgorgement of profits; (ii) significant reporting requirements for several years; and (iii) injunctive relief. In addition, most, if not all, states have statutes prohibiting deceptive and unfair acts and practices. The requirements under these state statutes are similar to those of the FTC Act.
RegulationWe accept and hold cryptocurrencies, which may subject us to exchange risk and additional tax and regulatory requirements
We have recently begun accepting cryptocurrencies bitcoin and etherium as a form of Direct Selling Activitiespayment. Cryptocurrencies are not considered legal tender or backed by any government and have experienced significant price volatility, technological glitches, and various law enforcement and regulatory interventions. If we fail to comply with regulations or prohibitions applicable to us, we could face regulatory or other enforcement actions and potential fines and other consequences. We also hold cryptocurrencies directly, subjecting us to exchange rate risk as well as the risk that regulatory or other developments and the recent price volatility may adversely affect the value of the cryptocurrencies we hold. The uncertainties regarding legal and regulatory requirements relating to cryptocurrencies or transactions using cryptocurrencies, as well as potential accounting and tax issues or other requirements relating to cryptocurrencies, could have a material adverse effect on our business.
Our business could be negatively affected if we are required to defend allegations that our direct selling activities are fraudulent or deceptive schemes, are against public interest, or are the sale of unregistered securities.
Direct selling activities are regulated by the FTC, as well as various federal, state, and local governmental agencies in the United States and foreign countries. These laws and regulations are generally intended to prevent fraudulent or deceptive schemes, often referred to as "pyramid"“pyramid” schemes, which compensate participants primarily for recruiting additional participants without significant emphasis on product sales.
Regulators may take the position that some or all of our products are deemed to be securities, the sale of which has not been registered. The laws and regulations governing direct selling are modified from time to time, and like other direct selling companies, we may be subject from time to time to government investigations related to our direct selling activities. This may require us to make changes to our business model and our compensation plan.
Our independent distributors could fail to comply with applicable legal requirements or our distributor policies and procedures, which could result in claims against us that could harm our business.
Our independent distributors are independent contractors and, accordingly, we are not in a position to directly provide the same oversight, direction, and motivation as we wouldcould if they were our employees. As a result, there can be no assurancewe cannot assure that our independent distributors will comply with applicable laws or regulations or our distributor policies and procedures, participate in our marketing strategies or plans, or accept our introduction of new products.procedures.
Extensive federal, state, local, and international laws regulate our business, products and direct selling activities. Because we have expanded into foreign countries, our policies and procedures for our independent distributors differ slightly in some countries due to the different legal requirements of each country in which we do business.
Our proprietary systems may be compromised by hackers.
Our current products and other products and services that we may develop in the future will be based on proprietary software and customer-specific data that we protect by routine measures such as password protection, confidentiality and nondisclosure agreements with employees, and similar measures. Any unauthorized access to our software or data could materially disrupt our business and result in financial loss and damages to our business reputation.
Our future success is largely dependent on our current management.
Our business was built by the vision, dedication, and expertise of our officers Ryan Smith, Annette Raynor, Chad Miller, Mario Romano, and William Kosoff, who are responsible for our day-to-day operations and creative development. Our success is dependent upon the continued efforts of these people. If it became necessary to replace them, it is unlikely new management could be found that would have the same level of knowledge and dedication to our success. The loss of the services of these professionals, especially in the development of future proprietary software, patents, or applications, would adversely affect our business.
Risks Related to Our Common Stock
We have a history of operating losses and expect to report future losses that may cause our stock price to decline.
For the operating period since inception (August 1, 2005) through March 31, 2017,2019, we have incurredreported an accumulated deficit of $25,096,983. We reported a net cumulative loss of $98,868,122. Although we reported net income of $1,753,666$5,011,036 for the year endingended March 31, 2017, our2019, and a net loss from operations was $852,371. We expect to continue to incur losses as we spend additional capital to market our products and establish our infrastructure and organization to support anticipated operations.of $3,940,856. We cannot be certain whether we will ever bebecome profitable, or if we do, that we will be able to continue to be profitable. Also, any economic weakness or global recession may limit our ability to market our products. Any of these factors could cause our stock price to decline and result in youinvestors losing a portion or all of yourtheir investment.
We will need to raise additional capital. If we are unable to raise additional capital, our business may fail.
Because our revenues are not yet sufficient to cover expenses or fund our growth, we need to secure on-goingongoing funding. If we are unable to obtain adequate additional financing, we may not be able to successfully market and sell our products, our business operations will most likely be discontinued, and we will cease to be a going concern. To secure additional financing, we may need to borrow money or sell more securities. Under these circumstances, we may be unable to secure additional financing on favorable terms or at all. Selling additional stock, either privately or publicly, would dilute the equity interests of our stockholders. If we borrow money, we will have to pay interest and may also have to agree to restrictions that limit our operating flexibility. If we are unable to obtain adequate financing, we may have to curtail business operations, which would have a material negative effect on operating results and most likely result in a lower stock price.
Our common stock price has experiencedbeen and may continue to be extremely volatile.
Our common stock has closed as low as $0.006 per share and as high as $0.0315 per share during the most recent fiscal year. We believe this volatility may be caused, in part, by variations in our quarterly operating results, delays in development of our technologies, changes in market valuations of similar companies, and the volume of our stock in the past, and is expected to experience in the future, significant price and volume volatility, which substantially increases the risk that you may not be able to sell your shares at or above the price that you pay for the shares.market.
Certain factors, some of which are beyond our control, that may cause our share price to fluctuate significantly include, but are not limited to, the following:
Additionally, in recent years the stock market in general, and the Over-the-Counter Bulletin BoardOTC Markets and technology stocks in particular, have experienced extreme price and volume fluctuations. In some cases, these fluctuations are unrelated or disproportionate to the operating performance of the underlying company. These market and industry factors may materially and adversely affect our stock price regardless of our operating performance. The historical trading of our common stock is not necessarily an indicator of how it will trade in the future and our trading price as of the date of this prospectusreport is not necessarily an indicator of what the trading price of our common stock might be in the future.
In the past, class action litigation has often been brought against companies following periods of volatility in the market price of those companies’ common stock. If we become involved in this type of litigation in the future it could result in substantial costs and diversion of management attention and resources, which could have a further negative effect on your investment in our stock.stock price.
Shares of our common stock may be subject to price illiquidity and volatility because our shares may continue to be thinly traded and may never become eligible for trading on Nasdaq or a national securities exchange.
Although a trading market for our common stock exists, the trading volume has not been significant and an active trading market for our common stock may never develop. There currently is no analyst coverage of our business. During the period from March 31, 2016 through March 31, 2017 the average daily trading volume of our common stock was approximately 5,938 shares (or approximately 0.1% of the shares currently available in the market as of March 31, 2017). The trading volume of our sharesWe cannot assure that we will continue to be limited due to resale restrictions under applicable securities laws and the fact that approximately 55% of our outstanding shares are held by officers, directors and stockholders holding greater than a 5% interest in the Company. As a result of the limited trading market for our common stock and the lack of analyst coverage, the market price for our shares may continue to fluctuate significantly and will likely be more volatile than the stock market as a whole. There may be a limited demand for shares of our common stock due to the reluctance or inability of certain investors to buy stocks quoted for trading on the OTC Bulletin Board, lack of analyst coverage of our common stock and limited trading market for our common stock. As a result, even if prices appear favorable, there may not be sufficient demand to complete a stockholder’s sell order. Without an active public trading market or broader public ownership, shares of our common stock are likely to be less liquid than the stock of public companies with broad public ownership and an active trading market, and any of our stockholders who attempt to sell their shares in any significant volumes may not be able to do so at all, or without depressing the publicly quoted bid prices for our shares.
While we may, at some point, be able to meet the requirements necessary for our common stock toever be listed on the NASDAQ stock marketNasdaq Stock Market or on another national securities exchange, we cannot assure you that we will ever achieve such a listing.exchange. Listing on one of the NASDAQNasdaq markets or one of the national securities exchanges is subject to a variety of requirements, including minimum trading price and minimum public “float”��float” requirements. There are also continuing eligibility requirements for companies listed on national securities exchanges. If we are unable to satisfy the initial or continuing eligibility requirements of any such market, then our stock may not be listed or could be delisted. This could result in a lower trading price for our common stock and may limit yourthe ability of our stockholders to sell yourtheir shares, which could result in you losinga loss of some or all of yourtheir investments.
There is no assurance of an established public trading market, which would adversely affectIf we fail to file periodic reports with the ability of investors inU.S. Securities and Exchange Commission, our companycommon stock will not be able to sell their securities inbe traded on the public markets.OTCQB.
Although our common stock trades on the OTCQB, a regular trading market for our common stock may not be sustained in the future. OTC Markets limits quotation on the OTCQB to securities of issuers that are current in their reports filed with the SEC.Securities and Exchange Commission. If we fail to beremain current in the filing of our reports with the SEC,Securities and Exchange Commission, our common stock will not be able to be traded on the OTCQB. The OTCQB is an inter-dealer market that provides significantly less liquidity than a national securities exchange or automated quotation system. Quotes for stocks included on the OTCQB are not listed in the financial sections of newspapers as are those for stocks listed on national securities exchanges or automated quotation systems. Therefore, prices for securities traded solely on the OTCQB may be difficult to obtain and holders of common stock may be unable to resell their securities at or near their original offering price or at any price. Market prices for
Because our common stock mayis considered a “penny stock,” any investment in our shares is considered to be influenced by a number of factors, including:high-risk investment and is subject to restrictions on marketability.
Our Common Stock will be subject tocommon stock is considered a “penny stock” on the “Penny Stock” rules promulgated byOTC Markets as it currently trades for less than $5.00 per share. The OTC Market system is generally regarded as a less efficient trading market than the Securities and Exchange Commission.
Nasdaq Capital or Global Markets. The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition ofrules that regulate broker-dealer practices in connection with transactions in “penny stocks.” Penny stocks generally are equity securities with a "penny stock," for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share(other than securities registered on certain national securities exchanges or with an exercisequoted on the Nasdaq system, provided that current price of less than $5.00 per share, subject to certain exceptions. For any transaction involving aand volume information respecting transactions in these securities is provided by the exchange or system). The penny stock unless exempt, the rules require:
In order to approverequire a person's account for transactions in penny stocks, the broker or dealer must:
The broker or dealer must also deliver,broker-dealer, prior to anyeffecting a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure schedule prescribeddocument prepared by the Securities and Exchange Commission, relating towhich specifies information about penny stocks and the nature and significance of risks of the penny stock market, which,market. The broker-dealer also must provide the customer with bid and offer quotations for the penny stock, the compensation of the broker-dealer and any salesperson in highlight form:
Generally, brokers may be less willing to execute transactions in securities subject to the "penny stock" rules. This may make it more difficult for investors to dispose of our common stocktransaction, and cause a decline inmonthly account statements indicating the market value of our stock.
Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for theeach penny stock held in the accountcustomer’s account. In addition, the penny stock rules require that, prior to effecting a transaction in a penny stock not otherwise exempt from those rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and information onreceive the limitedpurchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the trading activity in the secondary market in penny stocks.for our common stock.
Failure to Achieve And Maintain Internal Controls In Accordance With Sections 302 And 404(A) Of The Sarbanes-Oxley Act Of 2002 Could Have A Material Adverse Effect On Our Business And Stock Price.
If we fail to maintain adequate internal controls or fail to implement required new or improved controls, as such control standards are modified, supplemented or amended from time to time; we may not be able to assert that we can conclude on an ongoing basis that we have effective internal controls over financial reporting. Effective internal controls are necessary for us to produce reliable financial reports and are important in the prevention of financial fraud. If we cannot produce reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and there could be a material adverse effect on our stock price. We have examined and evaluated our internal control procedures, including controls over financial reporting to satisfy the requirements of Section 404(a) of the Sarbanes-Oxley Act, as required for our Annual Report on Form 10-K for the year ended March 31, 2017, and noted weaknesses that need to be addresses during the current reporting period in order for our internal controls to be effective. Failure to implement and maintain internal controls in accordance with sections 302 and 404(a) of the Sarbanes-Oxley Act of 2002 could have a material adverse effect on our business and stock price.
Because we have no plans to pay dividends on our common stock, stockholders must look solely to appreciation of our common stock to realize a gain on their investments.
We do not anticipate paying any dividends on our common stock in the foreseeable future. We currently intend to retain future earnings, if any, to finance the expansion of our business. Our future dividend policy is within the discretion of our board of directors and will depend upon variousnumerous factors, including our business, financial condition, results of operations, capital requirements, and investment opportunities. In addition, our senior credit facility limits the payment of dividends without the prior written consent of the lenders. Accordingly, stockholders must look solely to appreciation of our common stock to realize a gain on their investment. This appreciation may not occur.
Certain provisions of Nevada law and of our corporate charter may inhibit a potential acquisition of our Company,company, and this could depress our stock price.
Nevada corporate law includes provisions that could delay, defer, or prevent a change in control of our company or our management. These provisions could discourage information contests and make it more difficult for you and otherour stockholders to elect directors and take other corporate actions. As a result, these provisions could limit the price that investors are willing to pay in the future for shares of our common stock. For example:
| ● | without prior stockholder approval, | |
| ● | there is no cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to elect director candidates; and | |
| ● | stockholders cannot call a special meeting of stockholders. |
Our indemnification of our directors and officers may limit the rights of our stockholders.
While our board of directors and officers are generally accountable to our stockholders and us, the liability of our directors and officers to all parties is limited in certain respects under applicable state law and our articles of incorporation and bylaws, as in effect. Further, we have agreed or may agree to indemnify our directors and officers against liabilities not attributable to certain limited circumstances. This limitation of liability and indemnity may limit rights that our stockholders would otherwise have to seek redress against our directors and officers.
Additional issuances of stock options and warrants, convertible notes, and stock grants will cause additional substantial dilution to our stockholders.
Given our limited cash, liquidity, and revenues, it is likely that in the future, as in the past, we will issue additional warrants, stock grants, and convertible debt to finance our future business operations and acquisitions and strategic relationships. The issuance of additional shares of common stock, the exercise of warrants, and the conversion of debt to stock could cause additional dilution to our stockholders and could have further adverse effects on the market price for our securities or on our ability to obtain future financing. The 2018 increase in our authorized shares from two billion to ten billion increased the magnitude of this risk substantially.
The amount of authorized common stock may result in management implementing anti-takeover procedures by issuing new securities.
The proportion of unissued authorized shares to issued shares could, under certain circumstances, have an anti-takeover effect, for example, by permitting issuances that would dilute the stock ownership of a person seeking to effect a change in the composition of our board of directors or contemplating a tender offer or other transaction for the combination of our company with another entity. Although, we have no current plans to issue additional stock for this purpose, management could use the additional shares that are now available or that may be available after a possible further recapitalization to resist or frustrate a third-party transaction. Generally, no stockholder approval would be necessary for the issuance of all or any portion of the additional shares of common stock unless required by law or any rules or regulations to which we are subject.
Item 1B. Unresolved Staff Comments
None.
CompanyOur headquarters isare located at 12 South 400 West, Salt Lake City, Utah 84101 and isare currently leased on a month to month lease arrangement. The Company opened a second customer support center location in Orem, Utah with a one-year lease expiring in August 2017. This lease will not be renewed.month-to-month basis. Corporate Finance iswas located in office space at 745 Hope Road, Eatontown, New Jersey, which is on a monthmonth-to-month lease, however in June of 2019, we signed a three-year lease agreement for office space at 234 Industrial Way West, Building A, Suite 202, in Eatontown, New Jersey. Corporate Finance is expected to month lease. The Company will maintainoccupy the month to month lease arrangement until it can determine propernew office utilization based on expansionspace beginning in July of key departments including finance and customer support services.2019.
From time to time, we may become involved in various lawsuits and legal proceedings which arise inIn the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse resultbusiness, we may be or have been involved in these or other matters may ariselegal proceedings from time to time that may harm our business. The Company had no pendingtime. Below is a description of all legal proceedings or claims as ofwe were involved in during the year ended March 31, 20172019, and through the date of this report.filing.
In May 2016, Wealth Generators, LLC, received a written request for production of documents from the Commodity Futures Trading Commission (the“CFTC”) that appeared to have been focused on claims made by Wealth Generators about the performance of its trading recommendations. Wealth Generators responded to that request for production and to several follow-up requests, with the last response from Wealth Generators having been submitted in November 2016. Wealth Generators answered additional questions on May 11, 2017. Wealth Generators has received no further communications from the CFTC since that date.
The Company has received notice from the New York State Workers Compensation Board that a judgement was filed against them in the amount of $13,000, along with total penalties of $29,034, however, effective July 5, 2017 the Company has confirmed a payment in the amount $4,350 will settle the amounts in full. Additionally, the Company’s wholly owned subsidiary, ITT, has received notice from the New York State Workers Compensation Board that a judgement was filed against them in the amount of $22,000, however, effective July 5, 2017 the Company has confirmed a payment in the amount $4,620 will settle the amounts in full. Accordingly, the Company has recorded $8,970 as an accrued liability and a selling, general and administrative expense as of, and during, the year ended March 31, 2017.
| ● | On November 1, 2017, we filed a lawsuit in the Fourth Judicial District Court for Utah County, State of Utah, Wealth Generators, LLC, v. Evan Cabral, Daniel Lopez, John Legarreta, Johnathan Lopez, Julian Kuschner, Nick Gomez, Luke Shulla, Nestor Velazquez, Christopher Terry, Isis De La Torre, Alex Morton, Ivan Briongos, Brandon Boyd, and International Markets Live Ltd. d/b/a iMarketslive, Civil No. 170401615, alleging corporate espionage and misappropriation of corporate information. The lawsuit alleges that International Markets Live Ltd., dba iMarketslive, conspired with a number of individuals affiliated with Wealth Generators to steal our confidential information, intellectual property, and trade secrets.On September 27, 2018, the court issued its ruling granting in part and denying in part our motion for preliminary injunction. On January 2, 2019, the parties entered into a settlement agreement in which they agreed to release all claims and have the litigation dismissed with prejudice, with neither party making any payment to the other, but with the defendants agreeing to make a $5,000 donation to charity. On February 22, 2019, the matter was dismissed with prejudice. | |
| ● | In February 2018, we received a subpoena from the United States Commodity Futures Trading Commission (“CFTC”). We complied with the terms of the subpoena, negotiated a resolution of this matter with the CFTC staff, and a final order was issued on September 14, 2018. Under the order, we did not admit or deny any of the allegations, agreed to pay a fine of $150,000, and agreed not to act as an unregistered commodities trading advisor in the future. As of March 31, 2019, we have paid $90,000 to the CFTC and the remaining unpaid balance has been included in accounts payable and accrued liabilities on our consolidated balance sheet. | |
| ● | Jim Westphal filed a wage claim against Kuvera, LLC (at the time named Wealth Generators, LLC), in the United States District Court for the District of Utah, Central Division (Case No. 2:18-cv-00080) in the amount of $6,500 plus liquidated damages. Mr. Westphal is claiming unpaid overtime wages. We contend that Mr. Westphal was an independent contractor, hired on a limited basis to perform software services, and is accordingly not entitled to overtime payments under the Fair Labor Standards Act. Moreover, Mr. Westphal never provided the promised software pursuant to the parties’ agreement. We filed a counterclaim on July 12, 2018, seeking damages of approximately $20,000 and demanding a jury trial. In December 2018, the parties settled the matter with a joint motion. As a result of the settlement, we paid Mr. Westphal $1,500 and the case was dismissed. | |
| ● | In April of 2019, we received a summons and complaint from Fibernet Corp making claims of unpaid invoices and breach of contracts entered into in February 2012 and January 2015 as RazorData Corp. Without admitting fault or liability, in June of 2019, we entered into an agreement with Fibernet Corp to settle all claims and release us from any future claims in exchange for a payment of $35,160 to avoid ongoing litigation related to this matter. |
None of our directors, officers, or affiliates areis involved in a proceeding adverse to our business or havehas a material interest adverse to our business.
Item 4. Mine Safety Disclosure
Not applicable
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
The Company’sOur common stock is traded on the OTCQB under the symbol “INVU”. Prior to April 9, 2012, the stock symbol wasGISV. For an interim period of twenty business days the stock symbol was GISVD. On May 7, 2012, it reverted to GISV. Then on May 17, 2012 it assumed the new stock symbol “INVU”.“INVU.” The following table sets forth the range of low and high and low bidclosing sale prices for our common stock for each of its Common Stock,the periods indicated as reported and summarized by the OTCQB for the last two fiscal years and subsequent quarterly periods. The quotations set forth below reflect inter-dealer prices, without retail mark-up, markdown or commission and may not represent actual transactions.OTCQB:
| 2018 Fiscal First Quarter | ||||||||
| High | Low | |||||||
| April 1, 2017 – June 30, 2017 | $ | 0.070 | $ | 0.005 | ||||
| 2017 Fiscal Year | ||||||||
| High | Low | |||||||
| January 1, 2017 - March 31, 2017 | $ | 0.005 | $ | 0.002 | ||||
| October 1, 2016 - December 31, 2016 | $ | 0.012 | $ | 0.002 | ||||
| July 1, 2016 - September 30, 2016 | $ | 0.013 | $ | 0.003 | ||||
| April 1, 2016 - June 30, 2016 | $ | 0.10 | $ | 0.007 | ||||
| 2016 Fiscal Year | ||||||||
| High | Low | |||||||
| January 1, 2016 - March 31, 2016 | $ | 0.15 | $ | 0.07 | ||||
| October 1, 2015 - December 31, 2015 | $ | 2.50 | $ | 0.07 | ||||
| July 1, 2015 - September 30, 2015 | $ | 1.50 | $ | 0.07 | ||||
| April 1, 2015 - June 30, 2015 | $ | 1.14 | $ | 0.57 | ||||
| Low | High | |||||||
| 2020: | ||||||||
| First Quarter | $ | 0.008 | $ | 0.037 | ||||
| 2019: | ||||||||
| Fourth Quarter | $ | 0.008 | $ | 0.037 | ||||
| Third Quarter | $ | 0.006 | $ | 0.020 | ||||
| Second Quarter | $ | 0.010 | $ | 0.030 | ||||
| First Quarter | $ | 0.011 | $ | 0.030 | ||||
| 2018: | ||||||||
| Fourth Quarter | $ | 0.024 | $ | 0.070 | ||||
| Third Quarter | $ | 0.051 | $ | 0.100 | ||||
| Second Quarter | $ | 0.064 | $ | 0.080 | ||||
| First Quarter | $ | 0.005 | $ | 0.070 | ||||
| 2017: | ||||||||
| Fourth Quarter | $ | 0.002 | $ | 0.010 | ||||
| Third Quarter | $ | 0.002 | $ | 0.010 | ||||
| Second Quarter | $ | 0.003 | $ | 0.010 | ||||
| First Quarter | $ | 0.007 | $ | 0.100 | ||||
As of July 3rd, 2017, there wereJune 27, 2019, we had approximately 488 holders573 stockholders of record of the Company’sour common stock and 1,589,136,2812,679,376,966 shares of common stock issued and outstanding.
Dividends
The Company has neverHolders of shares of common stock are entitled to share pro rata in dividends and distributions for the common stock when, as, and if declared orby the board of directors out of funds legally available therefor. We have not paid any cash or stock dividends on itsour common stock. The Company currently intendsstock and intend to retain future earnings, if any, to finance the development and expansion of itsour business. AsFuture dividend policy is subject to the discretion of the board of directors and will depend upon a result, the Company does not anticipate paying any cash dividends in the foreseeable future.
Securities Authorized for Issuance Under Equity Compensation Plansnumber of factors, including future revenues, capital requirements, overall financial condition, and such other factors as our board of directors deems relevant.
Equity Compensation Plan InformationRecent Sales of Unregistered Securities
The following table summarizes the equity compensation plans under which our securities may be issued as of March 31, 2017.
| Plan Category | Number of securities to be issued upon exercise of outstanding options and warrants | Weighted-average exercise price of outstanding options and warrants | Number of securities remaining available for future issuance under equity compensation plans | |||||||||
| Equity compensation plans approved by security holders | 0 | N/A | 0 | |||||||||
| Equity compensation plan not approved by security holders | 37,500 | $ | 10.20 | 18,348 | ||||||||
RECENT SALES OF UNREGISTERED SECURITIES
During the year ended March 31, 2017 the Company issued 10,670,840 shares of common stock in exchange for $157,500 of cash proceeds.
The Company issued 6,072,200 shares of common stock withOn January 11, 2019, we entered into a value of $39,210 for legal and consulting services, of which $27,346 was for current year services and $173,647 was for services incurred in previous periods, therefore the Company recorded a gain on settlement of debt for $161,784.
The Company issued 21,069,580 and 400,000 shares of stock valued at $989,580 and $13,800 for compensation and director fees, respectively, of which $157,191 was for current year services and $846,189 was for amounts previously accrued.
The Company also issued 72,709,924 shares of its common stock in settlement of debt, wherein principal, accrued interest, and derivative liabilities were extinguished in the amounts of $1,983,686, $414,160, and $156,596, respectively, and the Company recognized a gain on the settlement of debtconvertible promissory note in the amount of $2,179,722.$138,000, with Power Up Lending Group, Ltd. and received proceeds of $138,000. The note incurs interest at 12% per annum and has a maturity date of April 11, 2020.
The Company also wrote off $250,000 worth of Common Stock Subscription Receivable to Additional Paid in Capital during the year endedIn March 31, 2017 due to the amounts being uncollectible.
On March 31, 2017, the Company entered into a Contribution Agreement with the members of Wealth Generators, LCC, a limited liability company (“Wealth Generators”), each of which are accredited investors (“Wealth Generators Members”) pursuant to which the Wealth Generators Members agreed to contribute 100% of the outstanding securities of Wealth Generators in exchange for an aggregate of 1,358,670,9422019, we issued 1,000,000 shares of our common stock of the Company (the “Wealth Generators Contribution”). The closing of the Wealth Generators Contribution occurred on March 31, 2017. Considering that, following the contribution, the Wealth Generators Members control the majority of the Company’s outstanding common stock and the Company effectively succeeded its operations to Wealth Generators, it is considered the accounting acquirer in this reverse-merger transaction. A reverse-merger transaction is considered, and accounted foran employee as a capital transaction in substance; it is equivalent to the issuance of Wealth Generators securities for the Company’s net monetary assets accompanied by a recapitalization. Wealth Generators is the surviving and continuing entity and the historical financials following the reverse merger transaction will be those of Wealth Generators.compensation.
The offers, sales, and issuancessecurities represented by each of the securitiestransactions described above were deemed to be exemptissued in reliance on the exemption from registration under the Securities Actprovided in reliance on Section 4(a)(2) of the Securities Act or Regulation D promulgated thereunderof 1933, as amended, for transactions by an issuer not involving aany public offering. The recipients of securities in each of these transactions acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the securities issued in these transactions. Each of the recipientsinvestors is either an “accredited investor” as defined in Rule 501(a) of Regulation D or a sophisticated investor able to bear the risks of the investment. Each investor confirmed the foregoing and acknowledged that the securities must be acquired and held for investment. All certificates evidencing the shares of common stock on conversion of the notes, issuances under the restricted stock grants, or upon the exercise of the warrants will bear a restrictive legend. No underwriter participated in the offer and sale of these transactions was an accredited or sophisticated personsecurities, and had adequate access, through employment, businessno commission or other relationships, to information about us.remuneration was paid or given directly or indirectly in connection therewith.
In May and June of 2019, we issued an aggregate of 39,215,648 shares of our common stock to Triton Funds LP (“Triton”) under the common stock purchase agreement that was entered into in December 2018 and amended in March and April 2019, for net proceeds of $325,000. Triton’s resale of these shares was registered on an S-1 registration statement that was declared effective by the SEC on May 9, 2019. We will not be issuing any additional shares to Triton under that agreement. These securities were issued to Triton as the result of arm’s-length negotiations directly with Triton in reliance on the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended, for transactions not involving any public offering, and Rule 506(b). No advertising or general solicitation was employed in offering the securities to Triton. No underwriter participated in the offer and sale of these securities to Triton, and no commission or other remuneration was paid or given directly or indirectly in connection therewith.
Item 6. Selected Financial Data
As the Company is a Smaller Reporting Company (as defined by Rule 229.10(f)(1)), the Company isWe are not required to provide the information under this item.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking StatementsPlan of Operations
CERTAIN STATEMENTS IN THIS ANNUAL REPORT MAY CONSTITUTE “FORWARDLOOKING STATEMENTS”. WHEN THE WORDS “BELIEVES,The following discussion should be read in conjunction with our consolidated financial statements and notes to our financial statements included elsewhere in this report. This discussion contains forward-looking statements that involve risks and uncertainties. When the words “believe,” “EXPECTS,“expect,” “PLANS,“plan,” “PROJECTS,“project,” “ESTIMATES” AND SIMILAR EXPRESSIONS ARE USED, THEY IDENTIFY FORWARD-LOOKING STATEMENTS. THESE FORWARD-LOOKINGSTATEMENTS ARE BASED ON MANAGEMENT’S CURRENT BELIEFS AND ASSUMPTIONS AND INFORMATION CURRENTLY AVAILABLE TO MANAGEMENT AND INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY THESE FORWARD-LOOKING STATEMENTS. INFORMATION CONCERNING FACTORS THAT COULD CAUSE OUR ACTUAL RESULTS TO DIFFER MATERIALLY FROM THESE FORWARD-LOOKING STATEMENTS CAN BE FOUND IN OUR PERIODIC REPORTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. WE UNDERTAKE NO OBLIGATION TO PUBLICLY RELEASE REVISIONS TO THESE FORWARD-LOOKING STATEMENTS TO REFLECT FUTURE EVENTS OR CIRCUMSTANCES OR REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS.“estimate,” and similar expressions are used, they identify forward-looking statements. These forward-looking statements are based on management’s current beliefs and assumptions and information currently available to management, and involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by these forward-looking statements. Information concerning factors that could cause our actual results to differ materially from these forward-looking statements can be found in our periodic reports filed with the U.S. Securities and Exchange Commission. The forward-looking statements included are made only as of the date of this report. We disclaim any obligation to update any forward-looking statements whether as a result of new information, future events, or otherwise.
BackgroundAcquisition
Investview, Inc. (the "Company" or “INVU”) was incorporated on August 10, 2005 under the laws of the State of Nevada as Voxpath Holding, Inc. On September 16, 2006, the Company changed its name to TheRetirementSolution.Com, Inc., on October 1, 2008 to Global Investor Services, Inc. and on March 27, 2012 to Investview, Inc. The Company currently markets directly and through its marketing partners as well as online, certain investor products and services that provide financial and educational information to its prospective customers and to its subscribers.
In August 2014, the Company formed Vickrey Brown Investments,July 20, 2018, we entered into a Purchase Agreement with United Games Marketing LLC, a Utah limited liability company, under the laws of California with 51% membership interests specializing in investment strategies which combine quantitative strategies, forensic accounting and volatility controls. At formation, the minority members paid an aggregate of $1,000 as equity contribution. The Company contributed $120,000 as equity contribution and is contingently obligated to issue 500,000 shares of common stock upon achieving certain milestones (as defined). Prior to all distributions, the Company is to receive 25% of all revenue generated until at which time the $120,000 equity contribution of the Company has been paid.
On December 4, 2014, the Company formed GGI Inc., a corporation organized under the laws of Delaware for the purchase certain assets including the source code and platform use for the development of an electronic marketplace to facilitate impact investing. On December 27, 2014, the Company exchanged 21% ownership of GGI Inc. for two employment agreements. In connection with the aforementioned exchange, the Company charged 21% of the fair value of the net assets distributed of $338,050 as employee compensation expense. On March 13, 2015, the Company sold GGI, Inc. in exchange for $1,147,500 cash, assumption of $579,452 of debt and return of an aggregate of 1,350,000 shares of the Company’s common stock previously issued to acquire CertusHoldings, Inc. (see Note 4).
On December 27, 2015, the Company entered into a Second Amended and Restated Operating Agreement whereby the Company surrendered its equity ownership in Vickrey Brown Investments LLC and transferred ownership of SAFE Management LLC (“Safe”) in exchange for 25% of all revenue generated by Vickrey Brown Investments, LLC until an aggregate of $120,000 has been paid and 30.6% of remaining and future revenue
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries Investment Tools & Training,United Games, LLC ("ITT"and United League, LLC (collectively “United Games”) for 50,000,000 shares of our common stock. The deal includes the purchase of the Utah-based companies’ wholly owned technology, staff, and Razor Data Corp ("Razor"). All significant inter-company transactions and balances have been eliminated in consolidation.trademarks, including the well-known FireFan mobile app.
On March 31, 2017, the Company entered intoUnited Games is a Contribution Agreement with the members of Wealth Generators, LCC, a limited liability company (“Wealth Generators”), pursuant to which the Wealth Generators Members agreed to contribute 100% of the outstanding securities of Wealth Generators in exchange for an aggregate of 1,358,670,942 shares of the common stock of the Company. The closing of the Wealth Generators Contribution occurred after close of business on March 31, 2017, therefore, effective April 1, 2017, Wealth Generators becamesocial gaming environment accessed through its FireFan mobile app and sold primarily through United Games affiliates. This acquisition provides us a wholly owned subsidiary that provides key synergies to our largest subsidiary, Kuvera, LLC. The acquisition of the Company.United Games brings these key benefits:
Transition ActivitiesCustomizable back office
Customizable commission engine
FireFan game/mobile app
FireFan brand (registered and trademarked)
In-house development team to deliver new and integrated technologies
Existing incoming revenue
Multiple newly engaged affiliates
An extensive network of contacts, customers, and affiliates
19,000 active paying members
Access to a 1.5-million-person database
AsOur management team is working through the transition to a resultcommon operations and development team for all of the acquisitionour companies and subsidiaries.
Results of Wealth Generators LLC, effective April 1, 2017, the Company is in a state of transition. Certain of the assets pertaining to the former Investview services offered prior to the acquisition have been sold or discontinued. Ryan Smith has been named the Chief Executive Officer replacing Dr. Joseph Louro who resigned on April 6, 2017. Annette Raynor has been named Chief Operating Officer replacing Anthony Lotito who resigned on April 3, 2017. William Kosoff remains Acting Chief Financial Officer but resigned from the Board of Directors on April 16, 2017. Nicholas Maturo and Louis Sagar resigned from the Board of Directors onOperations
Year Ended March 31, 2017. On June 6, 2017 Annette Raynor and Chad Miller were named2019, Compared to the Board of Directors. On April 7, 2017, the Company replaced the auditors Liggett & Webb PA (“former auditor”) and engaged Haynie and Company as its independent registered public accounting firm for the Company’s fiscal year endedYear Ended March 31,, 2017. 2018
The Company’s immediate focus is to complete all audited financial matters and disclosure events while facilitating the transition of both the Board of Directors and Corporate Officers.
Plan of Operations
With the acquisition of Wealth Generators LLC, Investview plans to focus entirely on the expansion and growth of the Wealth Generators product and distribution model. Investview Inc. also maintains ownership SAFE Management LLC a registered investment advisory firm in the state of New Jersey which lapsed in reporting. Plans to bring reporting current and re-establishing its registration is being undertaken. All former products offered by Investview are replaced entirely by the Wealth Generators LLC product line.
The Company’s target market is comprised of individuals who seek to learn how to improve their financial condition. They have an interest and need to learn how to reduce debt, budget, increase savings and allocate their financial resource to create additional income both active and passive.
The Company’s marketing strategy for their subscription based offering is unique in that it deploys a network marketing distribution method where current members may optionally choose to participate in the company’s bonus plan and sell the Company’s subscriptions to others.
Customer acquisition is realized through word of mouth marketing by those customers who actively distribute the product through home meetings, in person presentations, one-on-one interaction and large seminars organized and delivered by the distributors in conjunction with the company.
The Company’s plan is to continue to develop the in-place network and anticipates significant growth initiatives in Germany and Mexico. Additional markets in the Philippines, Costa Rica and Turkey are in development.
Over the past few years, Wealth Generators has intentionally increased expenses to prepare the Company’s platform to handle the steadily increasing subscription membership. Going forward, management believes the current state will support this growth without a significant increase in expenses other than customer support and the bonus plan which rises commensurate with revenues. Our investments in our platform, personnel, and executive management provides us the ability to handle over four times our current volume.
Investview will still need to address the larger undertaking of language translation and continued international expansion which will require additional funding. The Company currently has multiple lead sources that are finalizing their due diligence process and anticipates closing on this funding in the very near future.
Below we have described revenues and significant operating expenses for comparable periods:
Revenues
Revenue, decreased $222,461,net, increased $11,741,649, or 63%66%, from $353,956$17,917,432 for the year ended March 31, 20162018, to $131,465$29,659,081 for the year ended March 31, 2017.2019. The decreasemajority of the increase can be explained by our increase in subscription sales of $13,123,623, which related largely to our establishment of Kuvera France, S.A.S. in November of 2018 and sales occurring in the European Union during the current year compared to no such sales in the prior year. The remainder of the increase was due to our sales of equipment in the current year, versus no such sales in the prior year, explaining $694,954 of the increase. Our gross billings increased by 48%, or $11,348,471, to $34,992,883 in the year ended March 31, 2019, versus $23,644,412 in the year ended March 31, 2018; however, this was offset by refunds, incentives, credits, chargebacks, and amounts paid to suppliers.
Operating Costs
Operating costs increased $5,006,351, or 18%, from $28,593,586 for the year ended March 31, 2018, to $33,599,937 for the year ended March 31, 2019, mainly because of an increase in our commissions of $7,254,400, or 51%, from $14,271,929 for the year ended March 31, 2018, to $21,526,326 for the year ended March 31, 2019. This increase was due to increasing revenues as a lackresult of fundingthe growth of the distribution network.
Other Income (Expense)
Other income (expense) went from $(4,212,273) for the year ended March 31, 2018, to $(966,471) for the year ended March 31, 2019. The decrease is due to the loss on debt extinguishment and our inability to spend marketing dollars and attract new customers. Becausethe loss on spin-off of our cash flow challenges, we were unable to keep our technology updated, nor could we make improvements to such, therefore our existing customer base deteriorated. Furthermore,operations during the year ended March 31, 2017 management focused their efforts on the acquisition of Wealth Generators, Inc., therefore spent less time on top line growth.
Operating costs
Operating costs decreased $1,034,903, or 51%, from $2,018,739 for the year ended March 31, 20162018, as compared to $983,836 for the year ended March 31, 2017. This was due to a decrease in our cost of sales and service of $40,227 and a decrease in selling, general and administrative costs of $994,676. The decreases could mostly be explained by our overall reduction in operations and our decreasing revenues. Due to our cash flow shortages as we lacked the ability to spend money and started falling behind with our creditors, thus were forced to cut costs and reduce expenditures where possible.
Other income and expenses
Other income and (expense) went from $(439,617) for the year ended March 31, 2016 to $2,606,038 for the year ended March 31, 2017. For the year ended March 31, 2016 the otherno such expense was a result of interest expense of $660,498 and a loss on disposal of subsidiaries of $26,058, offset by a gain on derivative valuation of $246,939. Comparatively, for the year ended March 31, 2017 the other income was made up of a gain on debt extinguishment of $3,170,326, a gain on derivative valuation of $84,284, offset by interest expense of $648,573.
While the interest expense remained fairly consistent between years, there was a $162,655 decrease in the gain on derivative valuation which was mostly due to the Company’s note holders converting their notes into sharescurrent period. Additionally, during the year ended March 31, 2017. As a result of the conversions, derivative liabilities were extinguished through equity issuances and there were fewer changes in the derivative liability for valuations from period to period.
The $3,170,326 increase in the gain on debt extinguishment for the year ended March 31, 2017 could mostly be explained by the Company’s note holders converting their notes into shares. Specifically, the Company2018, we issued 72,709,924239,575,884 shares of itsour common stock in settlement of debt, wherein accrued liabilities, principal, accrued interest, and derivative liabilities were extinguished in the amounts of $1,994,362, $414,160,$430,892, $2,348,606, $20,696, and $128,490,$38,557, respectively, and the Companywe recognized a gainloss on the settlement of debt in the amount of $2,163,813. In addition to$3,186,394 in the note conversions the Company was also able to issue 6,072,200 sharesstatement of common stock with a value of $31,775 for legal and consulting services, of which $18,390 was for current year services and $173,647 was for services incurred in previous periods, therefore the Company recorded a gain on settlement of debt for $160,262. Another $630,642 of the gain could be explained by the Company writing off previously estimated tax liabilities and lastly, the Company’s CFO forgave $60,853 of liabilities owed to him, which also contributed to the recorded gain.operations.
Cash used in operating activitiesLiquidity and Capital Resources
During the year ended March 31, 2017,2019, we reported netincurred a loss of $5,011,036. However, only $2,983,251 was cash used in operating activities of $193,019 versus $1,108,542 in the same period last year. The variance from year to year was due to our overall reduction in operations due to ourrelated. This negative cash flow shortages as we lacked the abilitywas funded by borrowing $1,905,777 from related parties and proceeds of $4,115,961 from new lending arrangements, offset by repayments of $1,367,168 to spend moneyrelated parties and started falling behind with our creditors, thus we were forced to cut costs and reduce expenditures where possible.
Liquidity and capital resources
During fiscal year 2017, the Company reported net income of $1,753,666. However, this was mostly due to the Company’s gain$2,936,044 on debt, extinguishment of $3,170,326, as the Company reported net loss from operations of $852,371. Cashalong with $91,000 paid to repurchase our common stock. As a result, our cash and cash equivalents were $3,550, a decreasedecreased by $1,357,042 to $133,644 as compared to $1,490,686 at the beginning of $4,147 from the previous year of $7,697.fiscal year.
As of March 31, 2017, the Company’s2019, our current liabilities exceeded itsour current assets equal to a working capital deficit of $976,307.$2,222,990. A year ago, at March 31, 2016,2018, the working capital deficit was $2,823,549. Most significantly, the Company’s debt was reduced through conversions into common stock, stock issued for liabilities and for services, and debt forgiven or written off during the year ended March 31, 2017.$3,919,260.
The above matters, among others, raise substantial doubt about the Company’sour ability to continue as a going concern. During the year ended March 31, 2017, the Company2019, we raised $92,500$1,905,777 in cash proceeds from the issuance of a notesrelated parties and entering into a based factoring agreement, net of repayments,$4,115,961 in cash proceeds from new lending arrangements. Subsequent to March 31, 2019, we obtained $200,000 in cash proceeds from new lending arrangements and received proceeds$325,000 from the sale of stockour common stock.
Since our acquisition of $157,500. Additionally, effective April 1, 2017 in conjunction with a Contribution Agreement dated March 31, 2017, Wealth Generators LLC becamein April of 2017 we have implemented a wholly ownednumber of initiatives and we are beginning to see the positive impact of these actions. First, our largest subsidiary, Kuvera, has a bonus plan structure for distributors of our services which consistently paid out beyond our maximum threshold. Adjustments to this bonus plan have been made over the Companylast 12 months with additional adjustments planned for the next two quarters. This resulted in a gradual reduction in bonus payouts which reduced our losses. Second, we expanded the objectives of Investview through the acquisition and creation of additional subsidiaries to increase our sources of income and creating business activities in new sectors which includes:
| ● | Fully licensing SAFE Management LLC as a Registered Investment Advisor and Commodities Trading Advisor. This was done so SAFE Management could offer fully managed trading services to individuals who lacked the time to trade for themselves and provide reasonable advisory fees and minimum investment amounts to service individuals who do not meet the requirements of Qualified Investors. | |
| ● | We acquired the assets of United Games LLC and United League LLC which provided us highly experienced management, programmers, marketing and compliance personnel along with key technology components such as a fully coded back office and trademarked FIREFAN app. We are still in the process of adapting their technology to Kuvera operations and working on various distribution plans for FIREFAN. | |
| ● | We changed the name of our subsidiary WealthGen Global, which was an unused entity, to SAFETek LLC in preparation for our entry into the high-performance computing space to meet the needs of 4IR (Fourth Industrial Revolution) business needs which includes mining, blockchain technologies, gaming, artificial intelligence and 3-Dimensional rendering. This will enable us to provide HPC services to small, medium and startup entities who require specialized high-speed processing but cannot afford the infrastructure. By leasing our processing to these companies, we will aid these entities in bringing their products, inventions, improvements to market. | |
| ● | We have designed a program through Joint Venture known as APEX which enables individuals to purchase highly customized processing cards which SAFETek will lease from the purchasers for a fixed period of time at a fixed monthly lease payment. This enables individuals to participate in emerging growth without experiencing the volatility and potential loss experienced in the sector. |
These companies provide Investview a reverse-mergerstake in 4IR, HPC, app development, fintech, blockchain and the Company effectively succeeded its operationspersonal money management sectors. Each of these are areas that are targeted for significant growth spurred by innovations through technology.
While our liabilities are larger than our assets it is important to Wealth Generators. Subsequentnote that we seek to March 31, 2017 Wealth Generators receivedkeep operating expenses low. The assets we have acquired and will continue to seek out are those of technology, mobile apps, and human resources. These assets are not easily defined on our balance sheet but represent our ability to carry out our objectives which we believe will ultimately generating positive cash proceeds of $825,000 and $30,000 from newflow, reduced debt and equity financing arrangements, respectively.then profitability.
The Company's primary source ofFurther, while we have reported reoccurring losses and have an operating funds since inception hascapital deficiency, we have been cash proceeds from the private placements of common stock and proceeds from private placements of convertible and other debt. However, through Wealth Generators the Company plansable to reduce obligations and fund the Company withestablish multiple companies to create various revenue streams as we move forward. Our largest challenge is operational cash flow provided by operations. The Company also intendsas lending arrangements continue to raise additionalbe expensive causing us to deploy incoming cash to prior debt. We continue to seek short term capital through private placementsin arrangements that are partnership based with elements of debt and equity securities, but there can be no assurance that these funds will be available on terms acceptable tocombined. Additionally, our immediate focus is the Company, or will be sufficient to enable the Company to fully complete its development activities. If the Company is unable to fund the Company through operations or raise sufficientcontinued reduction in losses by controlling expenses, increasing revenue, and generating additional funds, it will have to develop and implement a plan to further extend payables, reduce overhead, or scale back its current business plan until sufficient additional capital is raised to support increased operations. There can be no assurance that such a plan will be successful.revenue streams.
Critical accounting policiesAccounting Policies
The preparation of our consolidated financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and judgments that affect our reported assets, liabilities, revenues, and expenses, and the disclosure of contingent assets and liabilities. We base our estimates and judgments on historical experience and on various other assumptions we believe to be reasonable under the circumstances. Future events, however, may differ markedly from our current expectations and assumptions. While there are a number of significant accounting policies affecting our consolidated financial statements; we believe the following critical accounting policy involves the most complex, difficult, and subjective estimates and judgments.
Revenue RecognitionBasis of Accounting
For revenue from product sales and services,Our policy is to prepare our financial statements on the Company recognizes revenueaccrual basis of accounting in accordance with Accounting Standards Codification subtopic 605-10, Revenue Recognition (“ASC 605-10”) which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided foraccounting principles generally accepted in the same period the related sales are recorded.United States of America.
Principles of Consolidation
The Company defers any revenue forconsolidated financial statements include the accounts of Investview, Inc., and our wholly owned subsidiaries, Kuvera, LLC, Investment Tools & Training, LLC, Razor Data Corp., and SAFE Management, LLC. We have determined that one affiliated entity, Kuvera LATAM S.A.S., which we conduct business with, is a variable interest entity and we are the product or services has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.
Revenue arises from subscriptions to the websites/software, workshops, online workshops and training and coaching/counseling services where the customers are charged a monthly subscription fee for access to the online training and courses and website/data. Revenues are recognized in the month the product and services are delivered.
The Company sells its products separately and in various bundles that include website/data subscriptions, educational workshops, online workshops and training, one-on-one coaching and counseling sessions, along with other products and services. The deferral policy for eachprimary beneficiary of the different typesentity’s activities. As a result, we have consolidated the accounts of revenues is summarized as follows:this variable interest entity into the accompanying consolidated financial statements. All intercompany transactions and balances have been eliminated in consolidation.
Use of Estimates
The preparation of consolidatedthese financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Fair Value ofRevenue Recognition
Effective April 1, 2018, we adopted the Financial Instruments
Fair value estimates discussed herein are based upon certain market assumptions and pertinent information available to management as of March 31, 2017 and 2016. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, notes payable, convertible notes payable, derivative liabilities and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.
Derivative Liability
The Company accounts for derivatives in accordance with ASC 815, which establishes accounting and reporting standards for derivative instruments and hedging activities, including certain derivative instruments embedded in other financial instruments or contracts and requires recognition of all derivatives on the balance sheet at fair value, regardless of hedging relationship designation. Accounting for changes in fair value of the derivative instruments depends on whether the derivatives qualify as hedge relationships and the types of relationships designated are based on the exposures hedged. At March 31, 2017 and 2016, the Company did not have any derivative instruments that were designated as hedges.
Stock-Based Compensation
The Company accounts for its stock based awards in accordance withStandards Board Accounting Standards Codification subtopic 718-10, Compensation (“ASC 718-10”), which requires a fair value measurement and recognition of compensation expense for all share-based payment awards made to its employees and directors, including employee stock options and restricted stock awards. The Company estimates the fair value of stock options granted using the Black-Scholes valuation model. This model requires the Company to make estimates and assumptions including, among other things, estimates regarding the length of time an employee will retain vested stock options before exercising them, the estimated volatility of our common stock price and the number of options that will be forfeited prior to vesting. The fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period.
Changes in these estimates and assumptions can materially affect the determination of the fair value of stock-based compensation and consequently, the related amount recognized in the Company’s consolidated statements of operations.
Concentrations of Credit Risk
Financial instruments and related items which potentially subject the Company to concentrations of credit risk consist primarily of cash, cash equivalents and trade receivables. The Company places its cash and temporary cash investments with credit quality institutions. At times, such investments may be in excess of the FDIC insurance limit of $250,000. As of March 31, 207 and 2016 the Company had no amounts in excess of the FDIC insurance limit.
Income Taxes
The Company has adopted Accounting Standards Codification subtopic 740-10, Income Taxes (“ASC 740-10”ASC”) which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statement or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Temporary differences between taxable income reported for financial reporting purposes and income tax purposes consist primarily of derivative liability and stock compensation accounting versus basis differences.
Net Loss per Share
The Company follows Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”) specifying the computation, presentation and disclosure requirements of earnings per share information. Basic loss per share has been calculated based upon the weighted average number of common shares outstanding. Convertible debt, stock options and warrants have been excluded as common stock equivalents in the diluted loss per share because their effect is anti-dilutive on the computation.
Recent Accounting Pronouncements
In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09,Subtopic 606-10, Revenue from Contracts with Customers (Topic 606)(“ASC 606-10”). ASU 2014-09 creates a new topic in theThe adoption of ASC Topic 606 and establishes a new control-based revenue recognition model, changes the basis for deciding when606-10 had no impact on prior year or previously disclosed amounts. In accordance with ASC 606-10, revenue is recognized over time or atmeasured based on a pointconsideration specified in time, provides new and more detailed guidance on specific topics, and expands and improves disclosures about revenue. In addition, ASU 2014-09 adds a new Subtopic to the Codification, ASC 340-40, Other Assets and Deferred Costs: Contracts with Customers, to provide guidance on costs related to obtaining a contract with a customer and costs incurredrecognized when we satisfy the performance obligation specified in fulfillingeach contract.
The majority of our revenue is generated by subscription sales and payment is received at the time of purchase. Our performance obligation is to provide services over a contractfixed subscription period; therefore, we recognize revenue ratably over the subscription period and deferred revenue is recorded for the portion of the subscription period subsequent to each reporting date. Additionally, we offer a 10-day trial period to subscription customers, during which a full refund can be requested if a customer does not like the product. Revenues are deferred during the trial period as collection is not probable until that time has passed. Revenues are presented net of refunds, sales incentives, credits, and known and estimated credit card chargebacks.
We generate revenue from the sale of cryptocurrency mining services to our customers through an arrangement with a customer that are notthird-party supplier. Our performance obligation is to arrange for the third-party to provide mining services to our customers and payment is received at the time of purchase, therefore revenue is recognized upon receipt of payment. We recognize revenue in the scopeamount of another ASC Topic. The guidancethe fee to which we are entitled to as an agent, or the amount of consideration that we retain after paying the third-party the consideration received in exchange for the services the third-party is to provide.
We generate revenue from the sale of high-speed computer processing equipment that is used for any of the following intense processing activities: protein folding, CGI rendering, game streaming, machine and deep learning, mining, independent financial verification, and general high-speed computing. Our performance obligation is to deliver an equipment package to our customers that includes hardware, software, and firmware and is drop-shipped to a hosting data center. We receive payment at the time of purchase and recognize revenue when the equipment package is delivered and ready for maintenance and hosting, which our customers arrange for, and obtain, from a separate third party that provides such services.
Revenue generated for the year ended March 31, 2019, was as follows:
| Subscription Revenue | Equipment Sales | Cryptocurrency Mining Revenue | Total | |||||||||||||
| Gross billings | $ | 28,518,660 | $ | 698,954 | $ | 5,775,269 | $ | 34,992,883 | ||||||||
| Refunds, incentives, credits, and chargebacks | (1,495,458 | ) | (4,000 | ) | (6,501 | ) | (1,505,959 | ) | ||||||||
| Amounts paid to supplier | - | - | (3,827,843 | ) | (3,827,843 | ) | ||||||||||
| Net revenue | $ | 27,023,202 | $ | 694,954 | $ | 1,940,925 | $ | 29,659,081 | ||||||||
Revenue generated for the year ended March 31, 2018, was as follows:
| Subscription Revenue | Equipment Sales | Cryptocurrency Mining Revenue | Total | |||||||||||||
| Gross billings | $ | 14,758,614 | $ | - | $ | 8,885,798 | $ | 23,644,412 | ||||||||
| Refunds, incentives, credits, and chargebacks | (859,035 | ) | - | - | (859,035 | ) | ||||||||||
| Amounts paid to supplier | - | - | (4,867,945 | ) | (4,867,945 | ) | ||||||||||
| Net revenue | $ | 13,899,579 | $ | - | $ | 4,017,853 | $ | 17,917,432 | ||||||||
Recent Accounting Pronouncements
In February 2016, the FASB issued ASU 2014-09No. 2016-02, “Leases (Topic 842)”.ASU 2016-02 changes the accounting for leased assets, principally by requiring balance sheet recognition of assets under lease arrangements. It is effective for public entities for annual reporting periods, and interim periods within those years, beginning after December 15, 2016, including interim periods therein. Early application is not permitted. Management is2018. In June of 2019, we signed a three-year lease agreement for office space in Eatontown, New Jersey, therefore we will adopt this standard effective April 1, 2019 and will account for our new lease agreement accordingly. We note that the processadoption of assessing theASU 2016-02 will have no other impact of ASU 2014-09 on the Company’sour consolidated financial statements.
There are no additional recently issued accounting pronouncements that we have not yet adopted that we believe are applicable or would have a material impact on our financial statements.
Off-Balance Sheet Arrangements
The Company doesWe do not have any off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, and results of operations, liquidity, or capital expenditures.
Trends, Risks, and Uncertainties
We have sought to identify what we believe to be the most significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise. Investors should carefully consider all of such risk factors before making an investment decision with respect to our Common Stock.common stock.
Cautionary Factors That May Affect Future Results
We have sought to identify what we believe are significant risks to our business, but we cannot predict whether, or to what extent, any of such risks may be realized nor can we guarantee that we have identified all possible risks that might arise.
Potential Fluctuations in Annual Operating Results
Our annual operating results may fluctuate significantly in the future as a result of a variety of factors, most of which are outside our control, including: the demand for our products and services; seasonal trends in purchasing, the amount and timing of capital expenditures and other costs relating to the commercial and consumer financing; price competition or pricing changes in the market; technical difficulties or system downtime; general economic conditionsconditions; and economic conditions specific to the consumer financing sector.
Our annual results may also be significantly impacted by the accounting treatment of acquisitions, financing transactions, or other matters. Particularly at our early stage of development, such accounting treatment can have a material impact on the results for any quarter. Due to the foregoing factors, among others, it is likely that our operating results may fall below our expectations or those of investors in some future quarter.
Management of Growth
We may experience growth, which will place a strain on our managerial, operational, and financial systems resources. To accommodate our current size and manage growth if it occurs, we must devote management attention and resources to improve our financial strength and our operational systems. Further, we will need to expand, train, and manage our sales and distribution base. There is no guarantee that we will be able to effectively manage our existing operations or the growth of our operations, or that our facilities, systems, procedures, or controls will be adequate to support any future growth. Our ability to manage our operations and any future growth will have a material effect on our stockholders.
If we fail to remain current on our reporting requirements, we could be removed from the OTC Bulletin BoardMarkets, which would limit the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market.
Companies trading on the OTC Bulletin Board,Markets, such as us, must be reporting issuers under Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and must be current in their reports under Section 13, in order to maintain price quotation privileges on the OTC Bulletin Board.Markets. If we fail to remain current on our reporting requirements, we could be removed from the OTC Bulletin Board.Markets. As a result, the market liquidity for our securities could be severely adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk
As a smaller reporting company, as defined in Rule 12b-2 of the Exchange Act, weWe are not required to provide the information required by this Item.item.
Item 8. Financial StatementsAND SUPPLEMENTARY DATA
The financial statements begin on Page F-1.
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
Previous independent registered public accounting firmNone.
On April 7, 2017 (the “Dismissal Date”), the Company advised Liggett & Webb PA (the “Former Auditor”) that it was dismissed as the Company’s independent registered public accounting firm. The decision to dismiss the Former Auditor as the Company’s independent registered public accounting firm was approved by the Company’s Board of Directors on April 7, 2017. The report of the Former Auditor on the Company’s financial statements for the year ended March 31, 2016 did not contain an adverse opinion or disclaimer of opinion, and such reports were not qualified or modified as to uncertainty, audit scope, or accounting principle except that such audit contained an explanatory paragraph, which noted that there was substantial doubt about the Company’s ability to continue as a going concern.
During the year ended March 31, 2016 and through the Dismissal Date, the Company has not had any disagreements with the Former Auditor on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to the Former Auditor’s satisfaction, would have caused them to make reference thereto in their reports on the Company’s financial statements for such years.
During the year ended March 31, 2016 and through the Dismissal Date, there were no reportable events, as defined in Item 304(a)(1)(v) of Regulation S-K.
New independent registered public accounting firm
On April 7, 2017 (the “Engagement Date”), the Company engaged Haynie & Company (“New Auditor”) as its independent registered public accounting firm for the Company’s fiscal year ended March 31, 2017. The decision to engage the New Auditor as the Company’s independent registered public accounting firm was approved by the Company’s Board of Directors.
During the two most recent fiscal years and through the Engagement Date, the Company has not consulted with the New Auditor regarding either:
Item 9A. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that material information required to be disclosed in our periodic reports filed under the Securities Exchange Act of 1934, as amended, or 1934 Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and to ensure that such information is accumulated and communicated to our management, including our chief executive officer and acting chief financial officer as appropriate, to allow timely decisions regarding required disclosure. We carried out an evaluation, under the supervision and with the participation of our management, including the principal executive officer and the principal financial officer (principal financial officer), of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13(a)-15(e) under the 1934Exchange Act, as of the end of the period covered by this report. Based on this evaluation, because of the Company’sour limited resources and limited number of employees, management concluded that our disclosure controls and procedures were ineffective as of March 31, 2017.2019.
Management’s Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’sOur internal control over financial reporting is designed to provide reasonable assurances regarding the reliability of financial reporting and the preparation of theour financial statements of the Company in accordance with U.S. generally accepted accounting principles, or GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate.
With the participation of our Chief Executive Officer and Acting Chief Financial Officer (principal financial officer), our management conducted an evaluation of the effectiveness of our internal control over financial reporting as of March 31, 20172019 based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"(“COSO”). Based on our evaluation and the material weaknesses described below, management concluded that the Companywe did not maintain effective internal control over financial reporting as of March 31, 20172019, based on the COSO framework criteria. Management has identified the following material weaknesses regarding the lack of segregation of duties and the need for a strongerin internal control environment. Management ofover financial reporting: (1) We lack controls to ensure we are adequately capturing our liabilities at each reporting date. (2) We do not have the Companyappropriate processes or controls in place to efficiently or timely match transactions within our accounting system to our back-end operating system. (3) We lack the processes and controls necessary to timely reconcile our accounts and to adequately analyze complex disclosure and presentation issues. Our management believes that these material weaknesses have been due to the small size of the Company’sour accounting staff and reliance on outside consultants for external reporting. The Company expects that with the acquisition of Wealth Generators, LLC, moving forward the Company will have adequate resources to remediate these deficiencies.
In light of the above-mentioned material weaknesses, we performed additional analyses and procedures in order to conclude that our consolidated financial statements for the year ended March 31, 20172019, included in this Annual Report on Form 10-K were fairly stated in accordance with US GAAP.
This annualManagement’s report does not include an attestation report of our registered public accounting firm regardingon internal control over financial reporting. Management’s reportreporting was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission rules that permit us to provide only management’s report in this Annual Report on Form 10-K.
Limitations on Effectiveness of Controls and Procedures
Our management, including our Chief Executive Officer and Acting Chief Financial Officer (principal financial officer), does not expect that our disclosure controls and procedures or our internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Companycompany have been detected. These inherent limitations include, but are not limited to, the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Changes in Internal Controls
During the fiscal quarter ended March 31, 2017,2019, there have been no changes in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal controls over financial reporting.
None.
Item 10. Directors, Executive Officers and Corporate Governance
Directors and Executive Officers
The following table sets forth certain information with respect to our directors and executive officers during the 2017 Fiscal Year.officers:
| Name | Age | Position | ||
| Ryan Smith | Chief Executive Officer and Director | |||
| Annette Raynor | Chief Operating Officer and Director | |||
| Chad Miller | Director | |||
| William C. Kosoff | Acting Chief Financial Officer | |||
* Resigned as an executive officer and/or director.
At the close of business on March 31 2017, the Company entered into a Contribution Agreement with the members of Wealth Generators pursuant to which the Company acquired Wealth Generators. On March 30, 2017, Nicholas Maturo and Louis Sagar resigned as directors of the Company. Subsequently, Dr. Louro resigned voluntarily as an executive officer and director on April 6, 2017. On March 31, 2017, the board appointed Ryan Smith as a director of the Company. In addition, Ryan Smith and Annette Raynor were appointed as Chief Executive Officer and Chief Operating Officer, respectively.
Background of Executive Officers and Directors
Ryan Smith.Mr. Smith has served as director and Chief Executivechief executive officer since March 31, 2017.Since2017. Since 2013, Mr. Smith has served as the Chief Executive Officerchief executive officer of Kuvera, LLC, formerly Wealth Generators, LLC.LLC, our wholly owned subsidiary. Mr. Smith received his BS from Brigham YoungThe University of Utah in 2003.
Annette Raynor. Ms. Raynor has served as the Company’s Chief Operating Officerour chief operating officer since March 31, 2017, and as a director since June 6, 2017. Since 2013, Ms. Raynor has served as the Chief Operating Officerchief operating officer of Kuvera, LLC, formerly Wealth Generators, LLC, the Company’sour wholly owned subsidiary. Ms. Raynor holds her Series 65 Registered Investment Advisor license, Series 3 Commodity Futures, Series 34 Retail Off-Exchange Forex, and is a licensed realtor in the Statestate of New Jersey. Ms. Raynor is the general manager and licensed representative of SAFE Management LLC.
Chad Miller. Mr. Miller was appointed as a director on June 6, 2017. Mr. Miller co-founded Kuvera, LLC, formerly Wealth Generators, LLC, our wholly owned subsidiary, in 2013. Prior to 2013, Mr. Miller held his Series 63 – Uniform Securities License, Series 7 General Securities License, and Series 24 General Securities Principal License and was employed by various brokerage firms from 1999 through 2010.
William C. Kosoff –Kosoff.Chief Financial Officer and Director. FromSince September 2006, Mr. Kosoff has been a Director of the Company, and served in various positions, including Chief Financial Officer, Secretary,chief financial officer, secretary, and Treasurer during the past seven years.treasurer. He had a break in service as an officer and employee from December 2012 to April 2013, when he returned and currently servesbegan serving again as Acting Chief Financial Officer.acting chief financial officer. He was also formerly a director. He has worked in the high technology industry for 45 years, serving in Engineering, Marketing, Sales,engineering, marketing, sales, and Senior Managementsenior management positions with Rockwell International from 1960 to 1984. In 1984, he co-founded Telenetics Corp and served as Presidentits president and Chief Executive Officer.chief executive officer. In 1987, Telenetics became public through an IPO on NASDAQ and was acquired in 2006 by a private firm. Mr. Kosoff received his Bachelor of Arts in Physics from California State University in 1978 and earned a Professional Certificate in Accounting from New York University in 2010.
Dr. Joseph J. Louro. Former Chief Executive Officer and Former Chairman of the Board. In June of 2011, Dr. Louro joined the Company as Chief Executive Officer and was elected by the Board to serve as Chairman of the Board of Global Investor Services, Inc. on June 22, 2011.
Dr. Louro, from 2006 to 2011, served as the CEO and President of LDG-Louro Development Group, a business development company focused on real estate transactions, new construction and downtown development projects as well as foreclosure-bankruptcy turnaround solutions. From 1981 to 2006, Dr. Louro acted as an international speaker for live seminar educational companies. Dr. Louro’s topics for physicians and businessmen included success principles, practice management skills and leadership skills. Dr. Louro also taught staff and employees how to enhance the customers overall experience through first class service. Dr. Louro was licensed by the State of New Jersey in 1981 by the Board of Medical Examiners to practice as a chiropractor and, has since demonstrated the ability to run multiple offices with an integrated staff of chiropractic, medical and osteopathic physicians while also teaching and consulting.
Nicholas Maturo – Former Director. From February 2007 to June 2011 Mr. Maturo served as the Chief Executive Officer, President and Chairman of the Board of Global Investor Services, Inc. In June of 2011 Mr. Maturo stepped down from those positions and remains a Director and employee of the Company. From September 2005 to December 2006 Mr. Maturo was the Chief Executive Officer of EduTrades, Inc., a company that provides educational and training courses for students interested in learning about investing in the stock market and in other financial instruments. From September 2002 until December 2006 Mr. Maturo worked for Whitney Information Network, Inc., the parent of EduTrades, Inc. as its Chief Operating Officer and in 2004 also became its President. From 1981 to 2000, Mr. Maturo was employed at Philip Morris Cos. where he held a number of executive positions in finance, operations and strategy both at home and abroad. When he left Philip Morris, he was Chief Information Officer of Kraft International. Mr. Maturo earned a Bachelor of Commerce degree in finance and economics from McGill University and also completed the Executive General Management Program at McGill University.
Louis Sagar – Former Director. During the past five years Mr. Sagar has been and remains the principal in Old School Ventures, LLC, his own marketing consulting firm based in New York City. Previously, Mr. Sagar founded ZONA, a specialty home retailer, Mr. Sagar built a lifestyle merchandising brand with nine retail locations and wholesale operations distributing private label home accessories and lifestyle products throughout the United States, Europe, and Japan. In 1998 Mr. Sagar sold ZONA to a private investment group. Mr. Sagar has been a director of Newsgrade Corporation, the former parent of TRES and a significant shareholder of Voxpath, since April 1998 and a director of TRES since September 2005. In June 2007, Mr. Sagar became the Chairman and Chief Executive Officer of Auction Floor, Inc., a provider of web based technology to the auction industry.
Our directors are elected for a term of one year and/orand until their successors qualified, nominated, and elected.
Role of the Board
It is the paramount duty of the Boardboard to oversee the Company’s Chief Executive Officer (the “CEO”) and other seniorour management in the competent and ethical operation of the Companycompany on a day-to-day basis and to assure that the long-term interests of the shareholders are being served. To satisfy this duty, the directors take a proactive, focused approach to their position, and set standards to ensure that the Company iswe are committed to business success through maintenance of highambitious standards of responsibility and ethics.
The Boardboard of directors met formally a total of four timestwice during fiscal 2017.2019.
Committees
Our business, property, and affairs are managed by or under the direction of the board of directors. Members of the board are kept informed of our business through discussion with the chief executive and financial officers and other officers, by reviewing materials provided to them, and by participating at meetings of the board and its committees.
Audit Committee
The CompanyWe currently doesdo not have a designated Audit Committee,audit committee, and accordingly, the Company's Boardour board of Directors' policy is to pre-approvedirectors preapproves all audit and permissible non-audit services provided by the independent auditors. These services may includeauditor, including audit, services, audit-related, services, tax, services and other services. Pre-approvalPreapproval is generally provided for up to one year, and any pre-approval is detailed as to the particular service or category of services, and is generally subject to a specific budget. The independent auditorsauditor and management are required to periodically report to the Company's Boardour board of Directorsdirectors regarding the extent of services provided by the independent auditorsauditor in accordance with this pre-approval,preapproval and the fees for the services performed to date. The Boardboard of Directorsdirectors may also pre-approvepreapprove particular services on a case-by-case basis.
Compensation Committee
In March 2013, the Compensation Committee was re-established by Board action to oversee compensation of employees, consultants, and executives. The committee consists of the two outside Directors, Nicholas Maturo and Lou Sagar, as well as the CEO, Dr. Joseph J. Louro. The CompanyWe currently doesdo not have a designated Compensation Committee,compensation committee, and accordingly, the Company's Boardour board of Directors'directors will approve all compensation matters until such committee is established and approved.
Code of Ethics
The Company hasWe have a code of ethics that applies to all of the Company’sour employees, including itsour principal executive officer, principal financial officer, and principal accounting officer, and the Board. Adirectors, a copy of this codewhich is available in the Employee Handbook. The Company intendsWe intend to disclose any changes in or waivers from itsour code of ethics by posting such information on itsour website or by filing a Form 8-K.
Section 16(a) Compliance
Section 16(a) of the Securities Exchange Act of 1934, requires our directors, executive officers, and persons who own more than 10% of our common stock to file with the SECSecurities and Exchange Commission initial reports of ownership and reports of changes in ownership of common stock and other of our equity securities. During the year ended March 31, 2017,2019, our officers, directors, and 10% stockholders made the required filings pursuant to Section 16(a).
Item 11. Executive Compensation
Directors’ Compensation
CashThere was no compensation for outside Directors has been suspended except for reimbursement of reasonable and ordinary expenses. Compensation for allthe four Directorsdirectors, acting in their capacity as directors, during the year ending March 31, 2017 was 806,816 shares for each Director. 2019.
Executive Officers’ Compensation
The following table sets forth information concerning the annual and long-term compensation earned by or paid to our Chief Executive Officerchief executive officer and to other persons who served as executive officers as, at, and/or during the fiscal year ended March 31, 20172019, or who earned compensation exceeding $100,000 during fiscal year 20172019 (the “named executive officers”), for services as executive officers for the last two fiscal years.years:
Summary Compensation Table
| Name and Principal Position | Fiscal Year |
Salary |
Stock Awards |
Option Awards |
Non-Equity Incentive Plan Compensation | Change in Pension Value and Non Qualified Deferred Compensation Earnings |
All Other Compensation |
Total | ||||||||||||||||||||||||
| ($) | ($) | ($) | ($) | ($) | ($) | ($) | ||||||||||||||||||||||||||
| Ryan Smith [1] | 2019 | 225,000 | - | - | - | - | 293,242 | [2] | 518,242 | |||||||||||||||||||||||
| CEO and Director | 2018 | 207,500 | - | - | - | - | 131,685 | [3] | 339,185 | |||||||||||||||||||||||
| Annette Raynor [4] | 2019 | 225,000 | - | - | - | - | 297,442 | [5] | 522,442 | |||||||||||||||||||||||
| COO and Director | 2018 | 207,500 | - | - | - | - | 135,885 | [6] | 343,385 | |||||||||||||||||||||||
| Chad Miller [7] | 2019 | 225,000 | - | - | - | - | 293,242 | [8] | 518,242 | |||||||||||||||||||||||
| Director | 2018 | 207,500 | - | - | - | - | 131,685 | [9] | 339,185 | |||||||||||||||||||||||
| Mario Romano [10] | 2019 | 225,000 | - | - | - | - | 297,442 | [11] | 522,442 | |||||||||||||||||||||||
| Director of Finance | 2018 | 207,500 | - | - | - | - | 135,885 | [12] | 343,385 | |||||||||||||||||||||||
| William C. Kosoff | 2019 | 60,000 | - | - | - | - | - | 60,000 | ||||||||||||||||||||||||
| Acting CFO | 2018 | 52,000 | - | - | - | - | - | 52,000 | ||||||||||||||||||||||||
Summary Compensation Table
| Name and Principal Position | Fiscal Year | Salary | Stock Award | Option Awards | Non-Equity Incentive Plan Compensation | Change in Pension Value and Non Qualified Deferred Compensation Earnings | All Other Compen- sation | Total | ||||||||||||||||||
| ($) | ($) | ($) | ($) | ($) | ($) | ($) | ||||||||||||||||||||
| Dr. Joseph J. Louro | 2016 | 300,000 | (1) | None | None | 300,000 | ||||||||||||||||||||
| CEO and Chairman | 2017 | 150,000 | (1) | None | None | 150,000 | ||||||||||||||||||||
| William C. Kosoff | 2016 | 87,850 | (2) | None | None | 62,250 | 150,000 | |||||||||||||||||||
| Controller and CFO | 2017 | 95,704 | (2) | None | None | |||||||||||||||||||||
| Ryan Smith | 2016 | 99,750 | (3) | None | None | 27,500 | 127,250 | |||||||||||||||||||
| CEO & Founder | 2017 | 80,000 | (3) | None | None | 115,000 | 195,000 | |||||||||||||||||||
| Annette Raynor | 2016 | 99,750 | (4) | None | None | 27,500 | 127,250 | |||||||||||||||||||
| COO & Founder | 2017 | 80,000 | (4) | None | None | 115,000 | 195,000 | |||||||||||||||||||
| Chad Miller | 2016 | 26,000 | (5) | None | None | 67,500 | 127,250 | |||||||||||||||||||
| Director & Founder | 2017 | 40,000 | (5) | None | None | 155,000 | 195,000 | |||||||||||||||||||
| Mario Romano | 2016 | 99,750 | (6) | None | None | 27,500 | 127,250 | |||||||||||||||||||
| Finance & Founder | 2017 | 80,000 | (6) | None | None | 115,000 | 195,000 | |||||||||||||||||||
| A portion of |
| [2] | |
| [3] | Includes $30,000 in medical reimbursements, $70,710 for fiscal year 2018 revenue under the Founder Revenue Agreements discussed below, and $30,975 that was accrued but unpaid under the Founder Revenue Agreements. |
| [4] | A portion of |
| [5] | |
| [6] | Includes $34,200 in medical reimbursements, $75,210 for fiscal year 2018 revenue under the Founder Revenue Agreements discussed below, and $26,475 that was accrued but unpaid under the Founder Revenue Agreements. |
| [7] | A portion of |
| [8] | |
| [9] | Includes $30,000 in medical reimbursements, $70,710 for fiscal year 2018 revenue under the Founder Revenue Agreements discussed below, and $30,975 that was accrued but unpaid under the Founder Revenue Agreements. |
| [10] | A portion of |
| [11] | Includes $34,200 in medical reimbursements, $108,512 for fiscal year 2019 revenue under the Founder Revenue Agreements discussed below, and $154,730 that was accrued but unpaid under the Founder Revenue Agreements. |
| [12] | Includes $34,200 in medical reimbursements, $75,210 for fiscal year 2018 revenue under the Founder Revenue Agreements discussed below, and $26,475 that was accrued but unpaid under the Founder Revenue Agreements. |
Outstanding Equity Awards at Fiscal Year-End Table
Employment Agreements
Dr. Joseph LouroNo stock option awards were exercisable or unexercisable as of March 31, 2019, for any executive officer.
On June 22, 2011, Dr. Louro executed an employment agreementEmployee Stock Options
The nonqualified plan adopted in 2007 authorizes 65,000 shares, of which 47,500 have been granted as of March 31, 2019. The qualified plan adopted in October of 2008 authorizes 125,000 shares and was approved by a majority of our shareholders on September 16, 2009. As of March 31, 2019, 42,500 shares have been granted under the 2008 plan.
The following table summarizes the changes in employee stock options outstanding and the related prices for the shares of our common stock issued to employees under two employee stock option plans:
| Weighted | ||||||||||||||||
| Weighted | Average | |||||||||||||||
| Average | Remaining | Aggregate | ||||||||||||||
| Number of | Exercise | Contractual | Intrinsic | |||||||||||||
| Shares | Price | Life (years) | Value | |||||||||||||
| Options outstanding at March 31, 2017 | 35,000 | $ | 10.00 | 2.51 | $ | - | ||||||||||
| Granted | - | $ | - | |||||||||||||
| Exercised | - | $ | - | |||||||||||||
| Canceled / expired | - | $ | - | |||||||||||||
| Options outstanding at March 31, 2018 | 35,000 | $ | 10.00 | 1.51 | $ | - | ||||||||||
| Granted | - | $ | - | |||||||||||||
| Exercised | - | $ | - | |||||||||||||
| Canceled / expired | - | $ | - | |||||||||||||
| Options outstanding at March 31, 2019 | 35,000 | $ | 10.00 | 0.51 | $ | - | ||||||||||
| Options exercisable at March 31, 2019 | 35,000 | $ | 10.00 | 0.51 | $ | - | ||||||||||
Stock-based compensation expense in connection with options granted to employees for the Company, whichyear ended March 31, 2019 and 2018, was received by$0.
Employment Agreements and Revenue Share Agreements
The four founders of Wealth Generators, LLC, Ryan Smith, chief executive officer; Chad Miller, chief visionary officer; Annette Raynor, chief operating officer; and Mario Romano, director of finance and investor relations, all entered into Founder Employment Agreements effective October 1, 2017. The terms and covenants in the Company on June 24, 2011, pursuant to which he was appointed asfour agreements are the Chief Executive Officer and Chairmansame for each of the Company in consideration of an annual salary of $300,000. If certain performance metrics are achieved, then the base salary shall be increased to $400,000 during year twofounders and $500,000 during year three. Thehave a term of the agreement is for threefive years whichthat automatically renews for three year periodssuccessive five-year terms unless terminated prior to the 90th day following the expiration of the applicable term. Additionally, Dr. Louro will be eligibleThe agreements provide for an annual cash bonuses equalsalary of $225,000 with annual reviews by the board of directors or the designated compensation committee to at least 50% and up to 100%determine whether an increase in salary is appropriate based on our results of his salary subject to recommendationoperations, increased activities, or responsibilities of the Compensation Committeefounder, or such other factors as the board of directors or the Board of Directors. Dr. Louro will also bedesignated compensation committee thereof may deem appropriate. In addition, the founders are entitled to receive incentive bonuses upon the closing of strategic acquisitions, joint ventures or other strategic transactions and/or relationships which are intended to accrue a significant benefit to the Company, as recommended by the Compensation Committee of the Board of Directors or the Board of Directors. Dr. Louro will also be entitled to receive a special bonus upon the closing of capital funding events, through either public or private offerings, subject to approval by the Board. In addition to the salary and any bonus, Dr. Louro will be entitled to receive health and fringe benefits that are generally available to the Company’s managementour employees. As additional compensation, the Company granted Dr. Louro an initial award of 100,000 restricted shares of common stock of the Company and has agreed to provide an equity bonus not to exceed an aggregate of 275,000 shares for the years ended March 31, 2012, 2013 and 2014 based on certain operational improvements established by the Board. Dr. Louro will be entitled to receive shares equal to 20% of the operational improvement divided by $6.00.
Dr. Louro has agreed to receive only $1 per year until such time that the Company has sufficient cash flow in order to pay his salary. The salary per the contract will accrue as of June 22, 2011.
On April 6,October 11, 2017, Dr. Joseph Louro voluntarily resigned as Chairmanwe entered into Founder’s Revenue Agreements with Chad Miller, Annette Raynor, Mario Romano, and CEORyan Smith. As consideration for their efforts in founding Wealth Generators LLC, beginning January 1, 2018, for the month ended December 31, 2017, each of the founders has the right to receive three-quarters of one percent (0.75%) of our top-line revenue, which will be calculated and paid on a monthly basis. This right is permanent and irrevocable, is not connected in any manner to the founder’s employment with us, and will be treated as a resultportion of the employment agreement with Dr. Lourofounder’s estate if it has not been terminated.assigned by the founder prior to his or her death.
William Kosoff
On February 6, 2007As of April 3, 2017, upon the Company entered into a two year employment contract with William Kosoff as President and CFO (the “Kosoff Agreement”). In December 2015reverse acquisition of Wealth Generators LLC, Mr. Kosoff was furloughed byappointed as the Companyacting chief financial officer and $62,250 in salary was accrued per the terms of his agreement. The Kosoff Agreement providesresumed payroll as an employee at a first year annual salary of $150,000 with annual increases and performance based bonuses. The Kosoff Agreement automatically renewed for a successive two year term as of November 10, 2016.
Severance Policy
The employment agreements entered with Dr. Louro, and Mr. Kosoff, contain various severance provisions.mutually agreed reduced rate. In the event the employees resignhe resigns without good reason with 90 daysdays’ written notice or is terminated for cause (willful misconduct with respect to Mr. Kosoff)misconduct) with 30 daysdays’ written notice, the employeehe is entitled to all accrued and unpaid compensation as of the date of such termination and expense reimbursement.
In the event the employee resigns for good reason with 30 days written notice or is terminated by the Company without cause with 30 days’ notice, the employee is entitled to the following:
Tax treatment pertaining to the above payments will be referenced under “Tax Clause 280g” for payments and related taxes and if on termination the payments are subject to additional excise tax under Section 4999 of the Internal Revenue Code, under a change in control, the payments will be increased so that the tax effect is borne by the company.
Upon death or disability, the employee is entitled to the following:
Item 12. Security Ownership of Certain Beneficial Owners, Management and Related Stockholder Matters
The following table providessets forth certain information, as toof June 29, 2019, respecting the beneficial ownership of our outstanding common stock by: (i) any holder of more than 5%; (ii) each of the Named Executive Officers and directors; and (iii) our directors and Named Executive Officers as a group, based on 2,679,376,966 shares of common stock beneficially ownedoutstanding as of July 7, 2017 by:June 29, 2019. Except as otherwise indicated, each stockholder listed below has sole voting and investment power over the shares beneficially owned:
| Name of Beneficial Owner(1) | Common Stock Beneficially Owned | Percentage of Common Stock(2) | ||||||
| Principal Stockholders: | ||||||||
| CR Capital Holdings LLC(3) | 621,874,710 | 23.2 | % | |||||
| Directors and Officers: | ||||||||
| Chad Miller, Chairman(3) | 621,874,710 | 23.2 | % | |||||
| Ryan Smith, CEO and Director(3) | 621,874,710 | 23.2 | % | |||||
| Annette Raynor, COO and Director(4)(5) | 215,456,942 | 8 | % | |||||
| Mario Romano, Treasurer(4)(6) | 215,456,942 | 8 | % | |||||
| William C. Kosoff, Acting CFO | 3,936,875 | * | ||||||
All Officers and Directors as a group (5 persons)(3)(4)(5)(6) | 946,268,527 | 35.3 | % | |||||
| Name of Beneficial Owner (1) | Common Stock Beneficially Owned | Percentage of Common Stock (2) | ||||||
| Chad Miller, Chairman (1), (3) | 649,444,710 | 20.35 | % | |||||
| Ryan Smith, CEO and Director (1), (3) | 649,444,710 | 20.35 | % | |||||
| Annette Raynor, COO and Director (1), (4) | 408,501,693 | 12.80 | % | |||||
| Mario Romano, Co-Founder and Treasurer | 408,501,693 | 12.80 | % | |||||
| William C. Kosoff (1) Acting CFO (1) | 4,940,540 | <1 | % | |||||
| CR Capital Holdings LLC (3) | 649,444,710 | 40.70 | % | |||||
| Wealth Engineering LLC (4) | 408,501,693 | 25.60 | % | |||||
| Wealth Colony LLC (5) | 101,900,708 | 6.38 | % | |||||
| All Officers and Directors as a group (4 Persons) | 1,086,781,791 | 66.6 | % | |||||
| * | Less than 1%. | |
| (1) | Except as otherwise indicated, the address of each beneficial owner is c/o | |
| (2) | Applicable percentage ownership is based on |
| (3) |
| (4) |
| |
| (5) | In addition to the 110,456,942 shares owned by Wealth Engineering |
| (6) | In addition to the 110,456,942 shares owned by Wealth |
No Director,director, executive officer, affiliate, or any owner of record or beneficial owner of more than 5% of any class of our voting securities of the Company is a party adverse to the Companyus or has a material interest adverse to the Company.us.
Securities authorized for issuance under equity compensation plansEquity Compensation Plans
The following table provides certain informationsummarizes the equity compensation plans under which our securities may be issued as of March 31, 2017 with respect to all compensation plans under which shares of our common stock are authorized for issuance.2019:
| Number of Securities | ||||||||||||
| Number of | Remaining Available | |||||||||||
| Securities To Be | Weighted-Average | for Future Issuance under | ||||||||||
| Issued upon Exercise of | Exercise Price of | Equity Compensation Plans | ||||||||||
| Outstanding Options, | Outstanding Options, | (excluding securities | ||||||||||
| Warrants and Rights | Warrants and Rights | reflected in column (a)) | ||||||||||
| Plan Category | (a) | (b) | (c) | |||||||||
| Equity compensation plans approved by security holders | — | — | — | |||||||||
| Equity compensation plans approved by security holders | 35,000 | $ | 10 | — | ||||||||
Item 13. Certain Relationships and Related Transactions, and Director Independence
Summary of outstandingOur related party payables asconsisted of March 31, 2017 and 2016 is as follows:the following:
| 2017 | 2016 | |||||||
| Note payable, due July 31, 2015 [1] | $ | - | $ | 95,000 | ||||
| Convertible notes payable, due June 30, 2017 [2] | - | 258,799 | ||||||
| Accrued interest | - | 45,010 | ||||||
| Advances [3] | 127,199 | 156,573 | ||||||
| Accrued salaries and wages [4] | 5,000 | 472,960 | ||||||
| Total | 132,199 | 1,028,342 | ||||||
| Less: Short term portion | 132,199 | 733,241 | ||||||
| Long term portion | $ | - | $ | 295,101 | ||||
| Year Ended March 31, | ||||||||
| 2019 | 2018 | |||||||
| Short-term advances [1] | $ | 440,489 | $ | 1,880 | ||||
| Short-term promissory note entered into on 8/17/18 [2] | 105,000 | - | ||||||
| $ | 545,489 | $ | 1,880 | |||||
| [1] |
During the year ended March 31, 2016, the Company made payments in aggregate of $25,000 towards the principal of the note. During the year ended March 31, 2017 the Company issued 2,082,680 shares of common stock for $95,000 of note principal and $12,287 of accrued interest to reduce this liability to zero.
On August 12, 2012, the Company issued a $100,000 convertible promissory note with interest at 8% per annum, due August 12, 2015 to the Company’s former COO. The note is convertible into the Company’s common stock at $4.00 per share. In connection with the issuance of the note, the Company issued 12,500 warrants to purchase the Company’s common stock at $6.00 per share over five years. On June 30, 2014, the Company exchanged the convertible note and warrants to acquire the Company’s common stock for new convertible note and warrants.
In exchange for the above two notes the Company issued an aggregate of $258,799 related party notes in exchange for maturing notes and accrued interest that mature June 30, 2017 in exchange for the cancellation of $200,000 previously issued convertible notes, accrued interest of $35,260 and an incentive of $23,539. The Promissory Notes bears interest at a rate of 8% and can be convertible into 258,799 shares of the Company’s common stock, at a conversion rate of $1.00 per share. Interest will also be converted into common stock at the conversion rate of $1.00 per share.
In connection with the issuance of the new promissory notes, the Company issued detachable warrants granting the holder the right to acquire an aggregate of 258,799 shares of the Company’s common stock at $1.50 per share, net cancellation of previously issued 25,000 warrants to acquire the Company’s stock at $6.00 . The new warrants expire five years from the issuance.
| During the year ended March 31, | ||
| [2] | A member of the |
In addition to the above-mentioned related party lending arrangements, during the year ended March 31, 2019, we sold $41,500 worth of high-speed computer processing equipment to our Chief Executive Officer. This revenue has been included in the equipment sales reported on our Statement of Operations.
Item 14. Principal Accountant Fees and Services
We engaged Haynie & Company ("Haynie") as our independent registered public accounting firm for the audit of our financial statements for the year ended March 31, 2017 effective April 2017. Prior to the engagement of Haynie, Liggett & Webb P.A. ("Liggett") served as our independent registered public accounting firm.
The following is a summary of the fees billed to the Companyus for professional services rendered for the fiscal years ended March 31, 20172019 and 2016.2018:
| March 31, 2017 | March 31, 2016 | March 31, 2019 | March 31, 2018 | |||||||||||||
| Audit Fees | $ | 57,500- | $ | 51,500 | $ | 115,400 | $ | 153,000 | ||||||||
| Audit Related Fees | - | - | 15,500 | 7,800 | ||||||||||||
| Tax Fees | - | - | 4,000 | 3,000 | ||||||||||||
| All Other Fees | - | - | - | - | ||||||||||||
| Totals | $ | 57,500- | $ | 51,500 | ||||||||||||
| Total | $ | 134,900 | $ | 163,800 | ||||||||||||
AUDIT FEES.Audit Fees. Consists of fees billed for professional services rendered for the audit of Investview, Inc.'sour consolidated financial statements and review of the interim consolidated financial statements included in quarterly reports and services in connection with statutory and regulatory filings or engagements.
AUDIT-RELATED FEES.Audit-Related Fees. Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of Investview, Inc.’sour consolidated financial statements and are not reported under "Audit“Audit Fees."”
TAX FEES.Tax Fees. Consists of fees billed for professional services for tax compliance, tax advice, and tax planning.
ALL OTHER FEES.All Other Fees. Consists of fees for products and services other than the services reported above. There were no management consulting services provided in fiscal 2016 or 2017.
POLICY ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT AND PERMISSIBLE NON-AUDIT SERVICES OF INDEPENDENT AUDITORSPolicy on Audit Committee Preapproval of Audit and Permissible Non-Audit Services of Independent Auditors
The Company currently doesWe do not have a designated Audit Committee, and accordingly, the Company's Boardour board of Directors'directors’ policy is to pre-approvepreapprove all audit and permissible non-audit services provided by the independent auditors. These services may include audit services, audit-related services, tax services, and other services. Pre-approvalPreapproval is generally provided for up to one year and any 8 pre-approvalpreapproval is detailed as to the particular service or category of services and is generally subject to a specific budget. The independent auditors and management are required to periodically report to the Company's BoardCompany’s board of Directorsdirectors regarding the extent of services provided by the independent auditors in accordance with this pre-approval, and the fees for the services performed to date. The Boardboard of Directorsdirectors may also pre-approvepreapprove particular services on a case-by-case basis.
Title of Document | Location | |||
| Plan of | ||||
| Acquisition, Reorganization, Arrangement, Liquidation or Succession | ||||
| Contribution Agreement between Investview, Inc., Wealth Generators, LLC, and the members of Wealth Generators, | Incorporated by reference to the Current Report on Form 8-K filed April 6, 2017 | |||
| Item 3 | Articles of Incorporation and Bylaws | |||
| 3.01 | Articles of Incorporation | Incorporated by reference to the Form 10SB12G filed August 12, 1999 | ||
| 3.02 | Articles of Amendments to the Articles of Incorporation | Incorporated by reference to the Form 10SB12G filed August 12, 1999 | ||
| 3.03 | Bylaws | Incorporated by reference to the Form 10SB12G filed August 12, 1999 | ||
| 3.04 | Amendment to Articles of Incorporation or by-laws | Incorporated by reference to the Current Report on Form 8-K filed February 15, 2007 | ||
| 3.05 | Certificate of Change filed pursuant to NRS 78.209 | Incorporated by reference to the Current Report on Form 8-K filed April 6, 2012 | ||
| 3.06 | Articles of Merger filed pursuant to NRS 92.A.200 | Incorporated by reference to the Current Report on Form 8-K filed April 6, 2012 | ||
| 3.07 | Certificate of Amendment to Articles of Incorporation | Incorporated by reference to the Definitive Information Statement filed December 20, 2017 | ||
| Item 4 | Instruments Defining the Rights of Security Holders, including indentures | |||
| 4.01 | Common Stock Specimen | Incorporated by reference to the Registration Statement on Form S-1 filed January 12, 2018 | ||
| Item 10 | Material Contracts | |||
| 10.01 | Form of Common Stock Purchase Warrant dated July 7, 2011 | Incorporated by reference to the Current Report on Form 8-K filed July 13, 2011 | ||
| 10.02 | Form of Common Stock Purchase Warrant – August 2012 | Incorporated by reference to the Current Report on Form 8-K filed August 20, 2012 | ||
| 10.03 | 2012 Incentive Stock Plan** | Incorporated by reference to the Registration Statement on Form S-8 filed July 25, 2012 | ||
| 10.04 | Form of Common Stock Purchase Warrant issued to Allied Global Ventures LLC | Incorporated by reference to the Current Report on Form 8-K filed October 8, 2013 | ||
| 10.05 | Form of Common Stock Purchase Warrant | Incorporated by reference to the Current Report on Form 8-K filed June 11, 2014 | ||
| 10.06 | Form of Common Stock Purchase Warrant – September 30, 2014 | Incorporated by reference to the Current Report on Form 8-K filed October 7, 2014 |
| Exhibit Number* | Title of Document | Location | ||
| 10.22 | Form of Conversion Agreement dated June 6, 2017 | Incorporated by reference to the Current Report on Form 8-K filed June 12, 2017 | ||
| 10.23 | Agreement entered into with CTB Rise International Inc. dated June 7, 2017 | Incorporated by reference to the Current Report on Form 8-K filed June 12, 2017 | ||
| Incorporated by reference to the Current Report on Form 8-K filed October 13, 2017 | ||||
| Incorporated by reference to the Current Report on Form 8-K filed October 13, 2017 | ||||
| Incorporated by reference to the Current Report on | ||||
| Incorporated by reference to the Current Report on | ||||
| Incorporated by reference to | ||||
| Incorporated by reference to | ||||
| Incorporated by reference to the | ||||
| Exclusive License Agreement between Investview, Inc. and Binnacle Research Marketing, Inc., entered November 13, 2017 | Incorporated by reference to the Current Report on Form 8-K filed November 15, 2017 | |||
| 10.32 | Product Contribution Agreement between Investview, Inc. and WestMyn Technology Services, Inc., entered November 13, 2017 | Incorporated by reference to the Current Report on Form 8-K filed November 15, 2017 | ||
| 10.33 | Securities Purchase Agreement between InvestView, Inc., and D-Beta One EQ, Ltd., entered December 6, 2017 | Incorporated by reference to the Current Report on Form 8-K filed December 13, 2017 | ||
| 10.34 | Registration Rights Agreement between InvestView, Inc., and D-Beta One EQ, Ltd., entered December 6, 2017 | Incorporated by reference to the Current Report on Form 8-K filed December 13, 2017 | ||
| 10.35 | Standby Equity Distribution Agreement between InvestView, Inc., and YAII PN, Ltd., entered December 6, 2017 | Incorporated by reference to the Current Report on Form 8-K filed December 13, 2017 | ||
| 10.36 | Purchase Agreement between United Marketing, LLC and Investview, Inc., entered July 20, 2018 | Incorporated by reference from Current Report on Form 8-K filed July 25, 2018 | ||
| 10.37 | Product Contribution Agreement between Investview, Inc. and WestMyn Technology Services, Inc., entered May 1, 2018 | Incorporated by reference from the Quarterly Report on Form 10-Q/A for the quarter ended June 30, 2018, filed September 5, 2018 |
| Exhibit Number* | Title of Document | Location | ||
| 10.38 | Capital Crypto Mining Agreement between Investview, Inc. and WestMyn Technology Services, Inc., entered May 1, 2018 | Incorporated by reference from the Quarterly Report on Form 10-Q for the quarter ended June 30, 2018, filed September 5, 2018 | ||
| 10.39 | Master Services Agreement between Investview, Inc., its assigns, and BYOBitcoin LLC | Incorporated by reference from Current Report on Form 8-K filed September 25, 2018 | ||
| 10.41 | Stock Buyback Letter Agreement between Investview, Inc. and Yorkville Advisors Global, LP and its subsidiaries dated September 13, 2018 | Incorporated by reference from Current Report on Form 8-K filed September 26, 2018 | ||
| 10.42 | Common Stock Purchase Agreement between Investview, Inc. and TRITON FUNDS, LP., entered December 29, 2018 | Incorporated by reference to the Current Report on Form 8-K filed January 7, 2019 | ||
| 10.43 | Registration Rights Agreement between Investview, Inc. and TRITON FUNDS, LP., entered December 29, 2018 | Incorporated by reference to the Current Report on Form 8-K filed January 7, 2019 | ||
| 10.44 | Share Donation Agreement between Investview, Inc. and TRITON FUNDS, LP, Ltd., entered December 29, 2018 | Incorporated by reference to the Current Report on Form 8-K filed January 7, 2019 | ||
| 10.45 | Joint Venture Agreement among Investview, Inc. and AI Data Consulting, LLC, and Freedom Enterprise, LLC | Incorporated by reference to the Current Report on Form 8-K/A filed March 8, 2019 | ||
| 10.46 | Amended Common Stock Purchase Agreement between Investview, Inc. and TRITON FUNDS LP entered March 22, 2019 | Incorporated by reference to the Current Report on Form 8-K filed March 26, 2019 | ||
| 10.47 | Form of Kuvera, LLC Crypto Mining Agreement | Incorporated by reference to Amendment No. 5 to the Registration Statement on Form S-1/A filed April 17, 2019 | ||
| 10.48 | Second Amendment of Common Stock Purchase Agreement between Investview, Inc. and TRITON FUNDS LP entered April 11, 2019 | Incorporated by reference to the Current Report on Form 8-K filed April 12, 2019 | ||
| Item 21 | Subsidiaries of the Registrant | |||
| 21.01 | Schedule of Subsidiaries | Incorporated by reference to Amendment No. 2 to the Registration Statement on Form S-1/A filed March 11, 2019 | ||
| Item 23 | Consents of Experts and Counsel | |||
| 23.01 | Consent of Haynie & Company | This filing. | ||
| Item 31 | Rule 13a014(a)/15d-14(a) Certifications | |||
| 31.01 | Rule 13a-14a Certification of Principal Executive Officer | This filing. | ||
| 31.02 | Rule 13a-14a Certification of Principal Financial Officer | This filing. | ||
| Item 32 | Section 1350 Certifications | |||
| 32.01 | Section 1350 Certification of the Principal Executive Officer | This filing. | ||
| 32.02 | Section 1350 Certification of the Principal Financial Officer | This filing. |
| Exhibit Number* | Title of | Location | ||
| Item 101 | Interactive Data Files*** | |||
| 101.INS | XBRL Instance Document | This filing. | ||
| 101.SCH | XBRL Taxonomy Extension Schema | This filing. | ||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase | This filing. | ||
| 101.DEF | XBRL Taxonomy Extension | This filing. | ||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase | This filing. |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase | This filing. |
| * | All exhibits are numbered with the number preceding the decimal indicating the applicable SEC reference number in Item 601 and the number following the decimal indicating the sequence of the particular document. Omitted numbers in the sequence refer to documents previously filed as an exhibit. |
| ** | Identifies each management contract or compensatory plan or arrangement required to be filed as an exhibit, as required by Item 15(a)(3) of Form 10-K. |
| *** | Users of this data are advised that, pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of this annual report for purposes of Sections 11 or 12 of the Securities Act of 1933 or Section 18 of the Exchange Act and otherwise are not subject to liability. |
Item 16. Form 10-K Summary
Not included.
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Investview Inc. | ||
| Dated: | By: | /s/ Ryan Smith |
| Ryan Smith | ||
| Chief Executive Officer | ||
| (Principal Executive Officer) | ||
| Dated: | By: | /s/ William C. Kosoff |
| William C. Kosoff | ||
| Acting Chief Financial Officer | ||
| (Principal Financial and Accounting Officer) | ||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| SIGNATURE | TITLE | DATE | ||
| /s/ Ryan Smith | Chief Executive Officer and Director | |||
| Ryan Smith | (Principal Executive Officer) | |||
| /s/ Chad Miller | Director | |||
| Chad Miller | ||||
| /s/ Annette Raynor | Chief Operating Officer and Director | |||
| Annette Raynor |
MARCH 31, 20172019 AND 20162018
FORMING A PART OF ANNUAL REPORT
PURSUANT TO THE SECURITIES EXCHANGE ACT OF 1934
INVESTVIEW, INC.
Index to Consolidated Financial Statements
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Stockholders of Investview, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheetsheets of Investview, Inc. (the Company) as of March 31, 2017,2019, and 2018, and the related consolidated statements of operations, stockholders’ deficit,equity, and cash flows for year then ended. Investview, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with the standardseach of the Public Company Accounting Oversight Board (United States). Those standards require that we planyears in the two-year period ended March 31, 2019, and perform the auditrelated notes (collectively referred to obtain reasonable assurance about whetheras the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
statements). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Investview, Inc.the Company as of March 31, 2017,2019, and 2018, and the results of its operations and its cash flows for each of the year thenyears in the two-year period ended March 31, 2019, in conformity with accounting principles generally accepted in the United States of America.
Consideration of the Company’s Ability to Continue as a Going Concern
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 24 to the financial statements, the Company has suffered losses from operations and its current cash flow is not enough to meet current needs. This raises substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regards to this matter are also described in Note 2.4. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Haynie & CompanyBasis for Opinion
Haynie & Company
Salt Lake City, Utah
July 12, 2017
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ToThese financial statements are the Boardresponsibility of Directors and
Stockholders of Investview, Inc.
We have audited the accompanying consolidated balance sheet of Investview, Inc. (the Company) as of March 31, 2016, and the related consolidated statements of operations, deficiency in stockholders’ equity and cash flows for the year then ended. The Company’s management is responsible for these consolidated financial statements.management. Our responsibility is to express an opinion on these consolidatedthe Company’s financial statements based on our audit.audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our auditaudits in accordance with the standards of the Public Company Accounting Oversight Board (United States).PCAOB. Those standards require that we plan and perform the auditsaudit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included considerationAs part of our audits, we are required to obtain an understanding of internal control over financial reporting, as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence supportingregarding the amounts and disclosures in the consolidated financial statements, assessingstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statement presentation.statements. We believe that our audit providesaudits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the/s/ Haynie & Company as of March 31, 2016, and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in the Note 2, the Company has suffered recurring losses from operations and has a significant accumulated deficit as of March 31, 2016, which raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to this matter are described in Note 2. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.Salt Lake City, Utah
June 28, 2019
/s/ Liggett & Webb, P.A.
New York, New YorkJuly 14, 2016
CONSOLIDATED BALANCE SHEETS
| March 31, | March 31, | |||||||
| 2017 | 2016 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 3,550 | $ | 7,697 | ||||
| Receivables | 150,000 | - | ||||||
| Deferred costs | - | 1,793 | ||||||
| Total current assets | 153,550 | 9,490 | ||||||
| Total assets | $ | 153,550 | $ | 9,490 | ||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ | 417,025 | $ | 1,078,465 | ||||
| Deferred revenue | 5,807 | 13,128 | ||||||
| Related party payables | 132,199 | 704,241 | ||||||
| Settlement payable | 344,392 | 344,392 | ||||||
| Debt, current portion | 73,011 | 378,460 | ||||||
| Current liabilities of discontinued operations | 120,266 | 120,266 | ||||||
| Derivative liability, short term portion | 37,157 | 194,087 | ||||||
| Total current liabilities | 1,129,857 | 2,833,039 | ||||||
| Debt, long term portion | - | 1,399,190 | ||||||
| Related party payables, long term portion | - | 295,101 | ||||||
| Derivative liability, long term portion | - | 64,721 | ||||||
| Long term liabilities | - | 1,759,012 | ||||||
| Total liabilities | 1,129,857 | 4,592,051 | ||||||
| Commitments and contingencies | - | - | ||||||
| STOCKHOLDERS' DEFICIT | ||||||||
| Preferred stock, par value: $0.001; 10,000,000 shares authorized, none issued and outstanding as of March 31, 2017 and 2016 | - | - | ||||||
| Common stock, par value $0.001; 2,000,000,000 and 60,000,000 shares authorized; 125,889,455 and 14,966,911 issued and 125,888,155 and 14,965,611 outstanding as of March 31, 2017 and 2016, respectively | 125,890 | 14,967 | ||||||
| Additional paid in capital | 97,774,514 | 96,282,849 | ||||||
| Common stock subscriptions (receivable) | - | (250,000 | ) | |||||
| Treasury stock, 1,300 shares | (8,589 | ) | (8,589 | ) | ||||
| Accumulated deficit | (98,868,122 | ) | (100,621,788 | ) | ||||
| Total stockholders' deficit | (976,307 | ) | (4,582,561 | ) | ||||
| Total liabilities and stockholders' deficit | $ | 153,550 | $ | 9,490 | ||||
| March 31, | March 31, | |||||||
| 2019 | 2018 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 133,644 | $ | 1,490,686 | ||||
| Prepaid assets | 6,685,970 | 3,555 | ||||||
| Receivables | 724,995 | 472,557 | ||||||
| Short-term advances | 10,000 | 10,000 | ||||||
| Short-term advances - related party | 500 | 36,510 | ||||||
| Other current assets | 142,061 | 480,370 | ||||||
| Total current assets | 7,697,170 | 2,493,678 | ||||||
| Fixed assets, net | 13,528 | 18,860 | ||||||
| Other assets: | ||||||||
| Intangible assets, net | 1,576,685 | - | ||||||
| Long term license agreement, net | 1,983,220 | 2,133,620 | ||||||
| Deposits | 4,500 | 4,500 | ||||||
| Total other assets | 3,564,405 | 2,138,120 | ||||||
| Total assets | $ | 11,275,103 | $ | 4,650,658 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued liabilities | $ | 3,897,013 | $ | 5,352,073 | ||||
| Customer advance | 265,000 | - | ||||||
| Deferred revenue | 1,876,727 | 863,740 | ||||||
| Derivative liability | 1,358,901 | - | ||||||
| Related party payables | 545,489 | 1,880 | ||||||
| Debt, net of discounts | 1,977,030 | 195,245 | ||||||
| Total current liabilities | 9,920,160 | 6,412,938 | ||||||
| Total liabilities | 9,920,160 | 6,412,938 | ||||||
| Commitments and contingencies | - | - | ||||||
| Stockholders’ equity (deficit): | ||||||||
| Preferred stock, par value: $0.001; 10,000,000 shares authorized, none issued and outstanding as of March 31, 2019 and 2018 | - | - | ||||||
| Common stock, par value $0.001; 10,000,000,000 shares authorized; 2,640,161,318 and 2,169,661,318 shares issued and outstanding as of March 31, 2019 and 2018, respectively | 2,640,161 | 2,169,661 | ||||||
| Additional paid in capital | 23,758,917 | 16,137,945 | ||||||
| Accumulated other comprehensive income (loss) | 1,363 | (2,483 | ) | |||||
| Accumulated deficit | (25,096,983 | ) | (20,085,947 | ) | ||||
| Total Investview stockholders’ equity (deficit) | 1,303,458 | (1,780,824 | ) | |||||
| Noncontrolling interest | 51,485 | 18,544 | ||||||
| Total stockholders’ equity (deficit) | 1,354,943 | (1,762,280 | ) | |||||
| Total liabilities and stockholders’ equity (deficit) | $ | 11,275,103 | $ | 4,650,658 | ||||
The accompanying notes are an integral part of these consolidated financial statements
| F-3 |
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME
| Years Ended March 31, | Year Ended March 31, | |||||||||||||||
| 2017 | 2016 | 2019 | 2018 | |||||||||||||
| Revenue, net: | $ | 131,465 | $ | 353,926 | ||||||||||||
| Revenue: | ||||||||||||||||
| Subscription revenue, net of refunds, incentives, credits, and chargebacks | $ | 27,023,202 | $ | 13,899,579 | ||||||||||||
| Equipment sales, net of refunds | 694,954 | - | ||||||||||||||
| Cryptocurrency mining service revenue, net of refunds and amounts paid to supplier | 1,940,925 | 4,017,853 | ||||||||||||||
| Total revenue, net | 29,659,081 | 17,917,432 | ||||||||||||||
| Operating costs and expenses: | ||||||||||||||||
| Cost of sales and service | 3,257 | 43,484 | 1,180,671 | 6,713,097 | ||||||||||||
| Selling, general and administrative | 980,579 | 1,975,255 | ||||||||||||||
| Commissions | 21,526,326 | 14,271,926 | ||||||||||||||
| Selling and marketing | 878,936 | 454,225 | ||||||||||||||
| Salary and related | 4,272,355 | 2,270,479 | ||||||||||||||
| Professional fees | 1,620,370 | 2,572,831 | ||||||||||||||
| General and administrative | 4,121,279 | 2,311,028 | ||||||||||||||
| Total operating costs and expenses | 983,836 | 2,018,739 | 33,599,937 | 28,593,586 | ||||||||||||
| Net loss from operations | (852,371 | ) | (1,664,813 | ) | (3,940,856 | ) | (10,676,154 | ) | ||||||||
| Other income (expense): | ||||||||||||||||
| Gain on derivative valuation | 84,284 | 246,939 | ||||||||||||||
| Gain on debt extinguishment | 3,170,326 | - | ||||||||||||||
| Loss on disposal of subsidiaries | - | (26,058 | ) | |||||||||||||
| Gain (loss) on debt extinguishment | 19,387 | (2,767,422 | ) | |||||||||||||
| Loss on fair value of derivative liability | (214,376 | ) | - | |||||||||||||
| Loss on spin-off of operations | - | (1,118,609 | ) | |||||||||||||
| Gain on bargain purchase | 971,282 | - | ||||||||||||||
| Realized gain (loss) on cryptocurrency | 16,241 | (10,939 | ) | |||||||||||||
| Unrealized gain (loss) on cryptocurrency | 106,488 | (135,729 | ) | |||||||||||||
| Interest expense - related parties | (20,000 | ) | (104,105 | ) | ||||||||||||
| Interest expense | (648,573 | ) | (660,498 | ) | (1,842,461 | ) | (74,976 | ) | ||||||||
| Other income (expense) | (3,032 | ) | (493 | ) | ||||||||||||
| Total other income (expense) | 2,606,038 | (439,617 | ) | (966,471 | ) | (4,212,273 | ) | |||||||||
| Income (loss) before income taxes | 1,753,666 | (2,104,430 | ) | (4,907,327 | ) | (14,888,427 | ) | |||||||||
| Income tax expense | - | - | (70,768 | ) | (24,589 | ) | ||||||||||
| Net income (loss) | $ | 1,753,666 | $ | (2,104,430 | ) | (4,978,095 | ) | (14,913,016 | ) | |||||||
| Less: net income (loss) attributable to the noncontrolling interest | 32,941 | - | ||||||||||||||
| Incoem (loss) per common share, basic and diluted | $ | 0.05 | $ | (0.14 | ) | |||||||||||
| Net income (loss) attributable to Investview stockholders | $ | (5,011,036 | ) | $ | (14,913,016 | ) | ||||||||||
| Income (loss) per common share, basic and diluted | $ | (0.00 | ) | $ | (0.01 | ) | ||||||||||
| Weighted average number of common shares outstanding, basic and diluted | 38,153,419 | 14,616,664 | 2,234,117,482 | 1,911,786,477 | ||||||||||||
| Other comprehensive income, net of tax: | ||||||||||||||||
| Foreign currency translation adjustments | $ | 3,846 | $ | - | ||||||||||||
| Total other comprehensive income | 3,846 | - | ||||||||||||||
| Comprehensive income (loss) | (4,974,249 | ) | (14,913,016 | ) | ||||||||||||
| Less: comprehensive income attributable to the noncontrolling interest | (3,846 | ) | - | |||||||||||||
| Comprehensive income (loss) attributable to Investview shareholders | $ | (4,978,095 | ) | $ | (14,913,016 | ) | ||||||||||
The accompanying notes are an integral part of these consolidated financial statements
| F-4 |
CONSOLIDATED STATEMENTSTATEMENTS OF STOCKHOLDERS' DEFICITSTOCKHOLDERS’ EQUITY (DEFICIT)
YEARS ENDED DECEMBERMARCH 31, 20172019 AND 20162018
| Common | ||||||||||||||||||||||||||||||||
| Additional | Stock | |||||||||||||||||||||||||||||||
| Common stock | Paid in | Subscription | Treasury | Accumulated | Non-controlling | |||||||||||||||||||||||||||
| Shares | Amount | Capital | Receivable | Stock | Deficit | Interest | Total | |||||||||||||||||||||||||
| Balance, March 31, 2015 | 14,535,076 | $ | 14,535 | $ | 96,018,216 | $ | (250,000 | ) | $ | (8,589 | ) | $ | (98,517,358 | ) | $ | (56,165 | ) | $ | (2,799,361 | ) | ||||||||||||
| Common stock issued for services | 331,835 | 332 | 92,653 | - | - | - | - | 92,985 | ||||||||||||||||||||||||
| Common stock issued in settlement of debt | 100,000 | 100 | 9,790 | - | - | - | - | 9,890 | ||||||||||||||||||||||||
| Reclass derivative liability to equity upon convertible note payoff | - | - | 162,190 | - | - | - | - | 162,190 | ||||||||||||||||||||||||
| Disposal of majority owned subsidiary | - | - | - | - | - | - | 56,165 | 56,165 | ||||||||||||||||||||||||
| Net loss | - | - | - | - | - | (2,104,430 | ) | - | (2,104,430 | ) | ||||||||||||||||||||||
| Balance, March 31, 2016 | 14,966,911 | 14,967 | 96,282,849 | (250,000 | ) | (8,589 | ) | (100,621,788 | ) | - | (4,582,561 | ) | ||||||||||||||||||||
| Common stock issued for cash | 10,670,840 | 10,671 | 146,829 | - | - | - | - | 157,500 | ||||||||||||||||||||||||
| Common stock issued for services | 6,072,200 | 6,072 | 25,703 | - | - | - | - | 31,775 | ||||||||||||||||||||||||
| Common stock issued in payment of compensation | 21,069,580 | 21,070 | 962,666 | - | - | - | - | 983,736 | ||||||||||||||||||||||||
| Common stock issued for director fees | 400,000 | 400 | 25,400 | - | - | - | - | 25,800 | ||||||||||||||||||||||||
| Common stock issued in settlement of debt | 72,709,924 | 72,710 | 303,289 | - | - | - | - | 375,999 | ||||||||||||||||||||||||
| Reclass derivative liability to equity upon convertible note payoff | - | - | 277,778 | - | - | - | - | 277,778 | ||||||||||||||||||||||||
| Write off of Subscription Receivable | - | - | (250,000 | ) | 250,000 | - | - | - | - | |||||||||||||||||||||||
| Net Income | - | - | - | - | - | 1,753,666 | - | 1,753,666 | ||||||||||||||||||||||||
| Balance, March 31, 2017 | 125,889,455 | $ | 125,890 | $ | 97,774,514 | $ | - | $ | (8,589 | ) | $ | (98,868,122 | ) | $ | - | $ | (976,307 | ) | ||||||||||||||
| Common stock | Additional Paid in | Treasury | Accumulated Other Comprehensive | Accumulated | Noncontrolling | |||||||||||||||||||||||||||
| Shares | Amount | Capital | Stock | Income | Deficit | Interest | Total | |||||||||||||||||||||||||
| Balance, March 31, 2017 | 125,889,455 | $ | 125,890 | $ | 805,637 | $ | (8,589 | ) | $ | - | $ | (5,154,387 | ) | $ | - | $ | (4,231,449 | ) | ||||||||||||||
| Common stock issued for cash | 267,127,500 | 267,128 | 2,228,260 | - | - | - | - | 2,495,388 | ||||||||||||||||||||||||
| Common stock issued for license agreement | 80,000,000 | 80,000 | 2,176,000 | - | - | - | - | 2,256,000 | ||||||||||||||||||||||||
| Common stock issued for services | 94,375,333 | 94,375 | 6,632,860 | - | - | - | - | 6,727,235 | ||||||||||||||||||||||||
| Common stock issued in settlement of debt | 239,575,884 | 239,576 | 5,377,558 | - | - | - | - | 5,617,134 | ||||||||||||||||||||||||
| Wealth Generators reverse acquisition | 1,358,670,942 | 1,358,670 | (804,759 | ) | - | - | - | - | 553,911 | |||||||||||||||||||||||
| Offering costs | 4,273,504 | 4,273 | (269,273 | ) | - | - | - | - | (265,000 | ) | ||||||||||||||||||||||
| Cancellation of stock | (250,000 | ) | (250 | ) | 250 | - | - | - | - | - | ||||||||||||||||||||||
| Cancellation of treasury stock | (1,300 | ) | (1 | ) | (8,588 | ) | 8,589 | - | - | - | - | |||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | (2,483 | ) | - | - | (2,483 | ) | ||||||||||||||||||||||
| Net income (loss) | - | - | - | - | - | (14,931,560 | ) | 18,544 | (14,913,016 | ) | ||||||||||||||||||||||
| Balance, March 31, 2018 | 2,169,661,318 | 2,169,661 | 16,137,945 | - | (2,483 | ) | (20,085,947 | ) | 18,544 | (1,762,280 | ) | |||||||||||||||||||||
| Common stock issued for acquisition | 50,000,000 | 50,000 | 750,000 | - | - | - | - | 800,000 | ||||||||||||||||||||||||
| Common stock issued for services and compensation | 402,000,000 | 402,000 | 6,385,600 | - | - | - | - | 6,787,600 | ||||||||||||||||||||||||
| Common stock repurchase | (7,000,000 | ) | (7,000 | ) | (84,000 | ) | - | - | - | - | (91,000 | ) | ||||||||||||||||||||
| Common stock issued as commitment fees | 22,500,000 | 22,500 | 47,372 | - | - | - | - | 69,872 | ||||||||||||||||||||||||
| Offering costs | 3,000,000 | 3,000 | 522,000 | - | - | - | - | 525,000 | ||||||||||||||||||||||||
| Foreign currency translation adjustment | - | - | - | - | 3,846 | - | - | 3,846 | ||||||||||||||||||||||||
| Net income (loss) | - | - | - | - | - | (5,011,036 | ) | 32,941 | (4,978,095 | ) | ||||||||||||||||||||||
| Balance, March 31, 2019 | 2,640,161,318 | $ | 2,640,161 | $ | 23,758,917 | $ | - | $ | 1,363 | $ | (25,096,983 | ) | $ | 51,485 | $ | 1,354,943 | ||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements
| F-5 |
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Year Ended March 31, | ||||||||
| 2017 | 2016 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income (loss) | $ | 1,753,666 | $ | (2,104,430 | ) | |||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Amortization of debt discount | 310,484 | 171,263 | ||||||
| Amortization of deferred compensation | - | 121,288 | ||||||
| Stock issued for services and compensation | 557,766 | 92,985 | ||||||
| Loan fees on new borrowings | 17,176 | 343,827 | ||||||
| New derivatives recorded as loan fees | 159,132 | - | ||||||
| (Gain) loss on derivative valuation | (84,284 | ) | (246,939 | ) | ||||
| (Gain) loss on debt settlement | (3,170,326 | ) | - | |||||
| Changes in operating assets and liabilities: | ||||||||
| Receivables | (150,000 | ) | 57,076 | |||||
| Deferred costs | 1,793 | 884 | ||||||
| Prepaid and other assets | - | 106,664 | ||||||
| Accounts payable and accrued liabilities | 265,801 | 223,158 | ||||||
| Deferred revenue | (7,321 | ) | (28,457 | ) | ||||
| Accrued Interest | 133,915 | 128,615 | ||||||
| Accrued Interest - related parties | 19,178 | 25,524 | ||||||
| Net cash (used in) operating activities | (193,019 | ) | (1,108,542 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | - | - | ||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds (repayments) for related party payables, net | 65,480 | 57,594 | ||||||
| Proceeds from new lending | 92,500 | 375,010 | ||||||
| Repayments for debt | (126,607 | ) | (122,102 | ) | ||||
| Proceeds from the sale of stock | 157,500 | - | ||||||
| Net cash provided by financing activities | 188,872 | 310,502 | ||||||
| Net decrease in cash and cash equivalents | (4,147 | ) | (798,040 | ) | ||||
| Cash and cash equivalents-beginning of period | 7,697 | 805,737 | ||||||
| Cash and cash equivalents-end of period | $ | 3,550 | $ | 7,697 | ||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | - | $ | - | ||||
| Income taxes | $ | - | $ | - | ||||
| Non cash financing activities: | ||||||||
| Common stock issued for accounts payable and accrued liabilities | $ | 173,647 | $ | - | ||||
| Common stock issued in settlement of debt | $ | 2,119,024 | $ | 3,000 | ||||
| Common stock issued for related party payables | $ | 890,948 | $ | - | ||||
| Subscription receivable recorded as contributed capital | $ | 250,000 | $ | - | ||||
| Derivative recorded as a debt discount | $ | 127,208 | $ | - | ||||
| Reclass derivative from liability to equity upon debt payoff | $ | 277,778 | $ | 162,190 | ||||
| Year Ended March 31, | ||||||||
| 2019 | 2018 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | (4,978,095 | ) | $ | (14,913,016 | ) | ||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
| Depreciation | 5,332 | 2,639 | ||||||
| Amortization of debt discount | 1,052,523 | - | ||||||
| Amortization of long-term license agreement | 150,400 | - | ||||||
| Amortization of intangible assets | 239,315 | - | ||||||
| Stock issued for services, compensation, and license agreement | 109,240 | 6,846,059 | ||||||
| Loan fees on new borrowings | 704,397 | - | ||||||
| Loss on spin-off of operations | - | 1,118,609 | ||||||
| Gain on bargain purchase | (971,282 | ) | - | |||||
| (Gain) loss on debt extinguishment | (19,387 | ) | 2,767,422 | |||||
| Loss on fair value of derivative liability | 214,376 | - | ||||||
| Realized (gain) loss on cryptocurrency | (16,241 | ) | 10,939 | |||||
| Unrealized (gain) loss on cryptocurrency | (106,488 | ) | 135,729 | |||||
| Changes in operating assets and liabilities: | ||||||||
| Receivables | 108,907 | 122,053 | ||||||
| Prepaid assets | (4,055 | ) | - | |||||
| Short-term advances from related parties | 36,010 | (36,510 | ) | |||||
| Other current assets | 461,038 | (627,038 | ) | |||||
| Deposits | - | 1,500 | ||||||
| Accounts payable and accrued liabilities | (1,314,971 | ) | 2,924,522 | |||||
| Customer advance | 265,000 | - | ||||||
| Deferred revenue | 1,016,385 | 422,369 | ||||||
| Accrued interest | 59,345 | 74,953 | ||||||
| Accrued interest - related parties | 5,000 | 104,105 | ||||||
| Net cash used in operating activities | (2,983,251 | ) | (1,045,665 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Payments for fixed assets | - | (11,264 | ) | |||||
| Cash received in acquisition | 3,740 | 3,550 | ||||||
| Net cash provided by investing activities | 3,740 | (7,714 | ) | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from related parties | 1,905,777 | 498,380 | ||||||
| Repayments for related party payables | (1,367,168 | ) | (1,316,500 | ) | ||||
| Proceeds from debt | 4,115,961 | 1,675,000 | ||||||
| Repayments for debt | (2,936,044 | ) | (1,424,578 | ) | ||||
| Payments for share repurchase | (91,000 | ) | - | |||||
| Proceeds from the sale of stock | - | 3,121,776 | ||||||
| Payments for offering costs | - | (15,000 | ) | |||||
| Net cash provided by financing activities | 1,627,526 | 2,539,078 | ||||||
| Effect of exchange rate translation on cash | (5,057 | ) | 3,371 | |||||
| Net increase (decrease) in cash and cash equivalents | (1,357,042 | ) | 1,489,070 | |||||
| Cash and cash equivalents-beginning of period | 1,490,686 | 1,616 | ||||||
| Cash and cash equivalents-end of period | $ | 133,644 | $ | 1,490,686 | ||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | 51,000 | $ | 117,500 | ||||
| Income taxes | $ | 70,768 | $ | 24,589 | ||||
| Non cash investing and financing activities: | ||||||||
| Common stock issued for acquisition | $ | 800,000 | $ | 662,048 | ||||
| Common stock issued in settlement of related party payables | $ | - | $ | 90,000 | ||||
| Common stock issued in settlement of debt | $ | - | $ | 2,232,606 | ||||
| Common stock issued for prepaid services and long term license agreement | $ | 6,678,360 | $ | 2,137,175 | ||||
| Cancellation of shares | $ | - | $ | 250 | ||||
| Cancellation of treasury shares | $ | - | $ | 8,589 | ||||
| Reductions to equity for offering costs accrued | $ | 525,000 | $ | - | ||||
| Liability for offering costs | $ | - | $ | 250,000 | ||||
| Shares issued for offering costs | $ | 3,000 | $ | 4,274 | ||||
| Price protection guarantee | $ | - | $ | 626,388 | ||||
| Derivative liability recorded as a debt discount | $ | 510,000 | $ | - | ||||
The accompanying notes are an integral part of these consolidated financial statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 20172019 AND 20162018
1.NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES
A summary of the significant accounting policies applied in the preparation of the accompanying consolidated financial statements follows:
Business and Basis of PresentationOrganization
Investview, Inc. (the "Company" or “INVU”) was incorporated on August 10, 2005January 30, 1946, under the laws of the Statestate of Utah as the Uintah Mountain Copper Mining Company. In January 2005, we changed domicile to Nevada asand changed our name to Voxpath Holding, Inc. OnIn September 16,of 2006, the Companywe merged The Retirement Solution Inc. through a Share Purchase Agreement into Voxpath Holdings, Inc. and then changed itsour name to TheRetirementSolution.Com, Inc., on and in October 1, 2008 changed our name to Global Investor Services, Inc. and, before changing our name to Investview, Inc., on March 27, 2012 to Investview, Inc. The Company currently markets directly and through its marketing partners as well as online, certain investor products and services that provide financial and educational information to its prospective customers and to its subscribers.2012.
In August 2014, the Company formed Vickrey Brown Investments, LLC, a limited liability company under the laws of California with 51% membership interests specializing in investment strategies which combine quantitative strategies, forensic accounting and volatility controls. At formation, the minority members paid an aggregate of $1,000 as equity contribution. The Company contributed $120,000 as equity contribution and is contingently obligated to issue 500,000 shares of common stock upon achieving certain milestones (as defined). Prior to all distributions, the Company is to receive 25% of all revenue generated until at which time the $120,000 equity contribution of the Company has been paid.
On December 4, 2014, the Company formed GGI Inc., a corporation organized under the laws of Delaware for the purchase certain assets including the source code and platform use for the development of an electronic marketplace to facilitate impact investing. On December 27, 2014, the Company exchanged 21% ownership of GGI Inc. for two employment agreements. In connection with the aforementioned exchange, the Company charged 21% of the fair value of the net assets distributed of $338,050 as employee compensation expense. On March 13, 2015, the Company sold GGI, Inc. in exchange for $1,147,500 cash, assumption of $579,452 of debt and return of an aggregate of 1,350,000 shares of the Company’s common stock previously issued to acquire CertusHoldings, Inc.
On December 27, 2015, the Company entered into a Second Amended and Restated Operating Agreement whereby the Company surrendered its equity ownership in Vickrey Brown Investments LLC and transferred ownership of SAFE Management LLC (“Safe”) in exchange for 25% of all revenue generated by Vickrey Brown Investments, LLC until an aggregate of $120,000 has been paid and 30.6% of remaining and future revenue
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Investment Tools & Training, LLC ("ITT") and Razor Data Corp ("Razor"). All significant inter-company transactions and balances have been eliminated in consolidation.
On March 31, 2017, the Companywe entered into a Contribution Agreement with the members of Wealth Generators, LCC,LLC, a limited liability company (“Wealth Generators”), pursuant to which the Wealth Generators Membersmembers agreed to contribute 100% of the outstanding securities of Wealth Generators in exchange for an aggregate of 1,358,670,942 shares of theour common stock of the Company.stock. The closing of the Wealth Generators Contribution occurred after close of business on March 31, 2017, therefore,Agreement was effective April 1, 2017, and Wealth Generators became aour wholly owned subsidiary of the Company and the former members of Wealth Generators became our stockholders and control the majority of the Company’sour outstanding common stock(see (see Note 13)5).
On June 6, 2017, we entered into an Acquisition Agreement with Market Trend Strategies, LLC, a company whose members are also former members of our management. Under the Acquisition Agreement, we spun-off our operations that existed prior to the merger with Wealth Generators and sold the intangible assets used in those pre-merger operations in exchange for Market Trend Strategies’ assumption of $419,139 in pre-merger liabilities.
On February 28, 2018, we filed a name change for Wealth Generators, LLC to Kuvera, LLC (“Kuvera”) and on May 7, 2018, we established WealthGen Global, LLC as a Utah limited liability company and our wholly owned subsidiary.
On July 20, 2018, we entered into a Purchase Agreement with United Games Marketing LLC, a Utah limited liability company, to purchase its wholly owned subsidiaries United Games, LLC and United League, LLC for 50,000,000 shares of our common stock (see Note 5).
On November 12, 2018, we established Kuvera France, S.A.S. to handle sales of our financial education and research in the European Union.
On December 30, 2018, our wholly owned subsidiary S.A.F.E. Management, LLC received its registration and disclosure approval from the National Futures Association. S.A.F.E. Management, LLC is now a New Jersey State Registered Investment Adviser, Commodities Trading Advisor, Commodity Pool Operator, and approved for over the counter FOREX advisory services.
On January 17, 2019, we renamed our non-operating wholly owned subsidiary WealthGen Global, LLC to SafeTek, LLC, a Utah limited liability company.
Nature of Business
Revenue RecognitionWe own a number of companies that each operate independently, but are accretive to one another. We are establishing a portfolio of wholly owned subsidiaries delivering leading-edge technologies, services, and research, dedicated primarily to the individual consumer. Following is a description of each of our companies.
For revenue fromKuvera, LLC provides research, education, and investment tools designed to assist the self-directed investor in successfully navigating the financial markets. These services include research, trade alerts, and live trading rooms that include instruction in equities, options, FOREX, ETFs, binary options, crowdfunding and cryptocurrency sector education. In addition to trading tools and research, we also offer full education and software applications to assist the individual in debt reduction, increased savings, budgeting, and proper tax management. Each product salessubscription includes a core set of trading tools/research along with the personal finance management suite to provide an individual with complete access to the information necessary to cultivate and manage his or her financial situation. Different packages are available through a monthly subscription that can be cancelled at any time at the discretion of the customer. A unique component of the product marketing plan is the distribution method whereby all subscriptions are sold via current participating customers who choose to distribute and sell the services by participating in the bonus plan. The bonus plan participation is purely optional but enables individuals to create an additional income stream to further support their personal financial goals and objectives.
Kuvera France S.A.S. is our entity in France that will distribute Kuvera products and services throughout the Company recognizes revenue in accordance with Accounting Standards Codification subtopic 605-10, Revenue Recognition (“ASC 605-10”) which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the selling price is fixed and determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management's judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded.European Union.
The Company defers any revenue for which the product or services has not been delivered or is subject to refund until such time that the Company and the customer jointly determine that the product has been delivered or no refund will be required.
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 20172019 AND 20162018
Revenue arises from subscriptionsS.A.F.E. Management, LLC is a Registered Investment Adviser and Commodity Trading Adviser that has been established to deliver automated trading strategies to individuals who find they lack the websites/software, workshops, online workshopstime to trade for themselves.
United League, LLC owns a number of proprietary technologies including FIREFAN a social app for sports enthusiasts. Technologies created to support any of the Investview companies are held under the United League structure.
United Games, LLC is the distribution network for United League technologies. Since the acquisition of United Games in July of 2018, we are working to combine the distributors of Kuvera and training and coaching/counseling services where the customersUnited Games. This is an on-going process.
SafeTek, LLC (formerly WealthGen Global, LLC) is a new addition that we are charged a monthly subscription feecurrently establishing for access to the online training and courses and website/data. Revenues are recognizedexpansion plans in the monthhigh-speed processing and cloud computing environment.
Investment Tools & Training, LLCandRazor Data Corp. currently have no operations or activities.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
Our policy is to prepare our financial statements on the product and services are delivered.accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.
Principles of Consolidation
The Company sells its products separatelyconsolidated financial statements include the accounts of Investview, Inc., and in various bundlesour wholly owned subsidiaries, Kuvera, LLC, Investment Tools & Training, LLC, Razor Data Corp., S.A.F.E. Management, LLC, SafeTek, LLC (formerly WealthGen Global, LLC), United Games, LLC, United League, LLC, and Kuvera France S.A.S. We have determined that include website/data subscriptions, educational workshops, online workshopsone affiliated entity, Kuvera LATAM S.A.S., which we conduct business with, is a variable interest entity and training, one-on-one coaching and counseling sessions, along with other products and services. The deferral policy for eachwe are the primary beneficiary of the different typesentity’s activities, which are similar to those of revenues is summarizedKuvera, LLC. As a result, we have consolidated the accounts of this variable interest entity into the accompanying consolidated financial statements. Further, because we do not have any ownership interest in this variable interest entity, we have allocated the contributed capital in the variable interest entity as follows:
Costa component of Salesnoncontrolling interest. All intercompany transactions and Servicebalances have been eliminated in consolidation.
The cost of sales and service consists of the cost of the data feeds that supply twenty minute delayed stock market data to the Company’s stock analysis software based tool, external partner commissions and other costs associated with the repair or maintenance of the website.
Use of Estimates
The preparation of these consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Fair Value of Financial InstrumentsForeign Exchange
Fair value estimates discussed hereinWe have consolidated the accounts of Kuvera France S.A.S. and Kuvera LATAM S.A.S. into our consolidated financial statements. The operations of Kuvera France S.A.S. are based upon certain market assumptionsconducted in France and pertinent information available to management asits functional currency is the Euro. The operations of March 31, 2017Kuvera LATAM S.A.S. are conducted in Colombia and 2016. The respective carrying value of certain on-balance-sheet financial instruments approximated their fair values. These financial instruments include cash, notes payable, convertible notes payable, derivative liabilities and accounts payable. Fair values were assumed to approximate carrying values for cash and payables because they are short term in nature and their carrying amounts approximate fair values or they are payable on demand.
Derivative Liabilityits functional currency is the Colombian Peso.
The Company accountsfinancial statements of Kuvera France S.A.S. and Kuvera LATAM S.A.S. are prepared using their respective functional currency and have been translated into U.S. dollars (“USD”). Assets and liabilities are translated into USD at the applicable exchange rates at period-end. Stockholders’ equity is translated using historical exchange rates. Revenue and expenses are translated at the average exchange rates for derivativesthe period. Any translation adjustments are included as foreign currency translation adjustments in accordance with ASC 815, which establishes accounting and reporting standards for derivative instruments and hedging activities, including certain derivative instruments embeddedaccumulated other comprehensive income in other financial instruments or contracts and requires recognition of all derivatives on the balance sheet at fair value, regardless of hedging relationship designation. Accounting for changes in fair value of the derivative instruments depends on whether the derivatives qualify as hedge relationships and the types of relationships designated are based on the exposures hedged. At March 31, 2017 and 2016, the Company did not have any derivative instruments that were designated as hedges. See Note 6 for discussion of the Company’s derivative liabilities.our stockholders’ equity (deficit).
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 20172019 AND 2016
Stock-Based Compensation2018
The Companyfollowing rates were used to translate the accounts for its stock based awards in accordance with Accounting Standards Codification subtopic 718-10, Compensation (“ASC 718-10”), which requires a fair value measurementof Kuvera France S.A.S. and recognition of compensation expense for all share-based payment awards made to its employees and directors, including employee stock options and restricted stock awards. The Company estimatesKuvera LATAM S.A.S. into USD at the fair value of stock options granted using the Black-Scholes valuation model. This model requires the Company to make estimates and assumptions including, among other things, estimates regarding the length of time an employee will retain vested stock
options before exercising them, the estimated volatility of our common stock price and the number of options that will be forfeited prior to vesting. The fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period.following balance sheet dates:
Changes in these estimates and assumptions can materially affect the determination of the fair value of stock-based compensation and consequently, the related amount recognized in the Company’s consolidated statements of operations.
Advertising Costs
| March 31, 2019 | March 31, 2018 | |||||||
| Euro to USD | 1.12200 | n/a | ||||||
| Colombian Peso to USD | 0.00031 | 0.00036 | ||||||
The Company expenses advertising costs as incurred. Advertising expense was $598following rates were used to translate the accounts of Kuvera France S.A.S. and $1,654Kuvera LATAM S.A.S. into USD for the years ended March 31, 2017 and 2016, respectively.following operating periods:
Cash and Cash Equivalents
| Year ended March 31, | ||||||||
| 2019 | 2018 | |||||||
| Euro to USD | 1.13580 | n/a | ||||||
| Colombian Peso to USD | 0.00033 | 0.00034 | ||||||
For purposes of the statements of cash flows, cash includes demand deposits, saving accounts and money market accounts. The Company considers all highly liquid debt instruments with maturities of three months or less when purchased to be cash equivalents. As of March 31, 207 and 2016 the Company had no cash equivalents.
ConcentrationsConcentration of Credit Risk
Financial instruments and related items whichthat potentially subject the Companyexpose us to concentrationsconcentration of credit risk consist primarily ofinclude cash, cash equivalentsaccounts receivable, and trade receivables. The Company places itsadvances. We place our cash and temporary cash investments with credit quality institutions. At times, such investments may be in excess of the FDIC insurance limit of $250,000. As of March 31, 2072019 and 20162018, cash balances that exceeded FDIC limits were $0 and $1,095,329, respectively, and we have not experienced significant losses relating to these concentrations in the Companypast.
Cash and Cash Equivalents
For purposes of reporting cash flows, we consider all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. As of March 31, 2019 and 2018, we had no amountscash equivalents.
Receivables
Receivables are carried at net realizable value, representing the outstanding balance less an allowance for doubtful accounts based on a review of all outstanding amounts. Management determines the allowance for doubtful accounts by regularly evaluating individual receivables and receivables are written off when deemed uncollectible. Recoveries of receivables previously written off are recorded when received. We had no allowance for doubtful accounts as of March 31, 2019 and 2018.
Cryptocurrencies
We hold cryptocurrency-denominated assets (“cryptocurrencies”) and include them in excessour consolidated balance sheet as other current assets. We record cryptocurrencies at fair market value and recognize the change in the fair value of our cryptocurrencies as an unrealized gain or loss in the consolidated statement of operations. As of March 31, 2019 and March 31, 2018, the fair value of our cryptocurrencies was $142,061 and $480,370, respectively. During the year ended March 31, 2019, we recorded $16,241 and $106,488 as realized and unrealized gain (loss) on cryptocurrency, respectively. During the year ended March 31, 2018, we recorded $(10,939) and $(135,729) as realized and unrealized gain (loss) on cryptocurrency, respectively.
Fixed Assets
Fixed assets are stated at cost and depreciated using the straight-line method over their estimated useful lives as follows:
| Furniture, fixtures, and equipment | 10 years | ||
| Computer equipment | 3 years |
When retired or otherwise disposed, the carrying value and accumulated depreciation of the FDIC insurance limit.fixed asset is removed from its respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. Expenditures for maintenance and repairs which do not extend the useful lives of the related assets are expensed as incurred.
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2019 AND 2018
Income TaxesFixed assets are presented net of accumulated depreciation of $12,505 and $7,173, as of March 31, 2019 and 2018, respectively. Total depreciation expense for the years ended March 31, 2019 and 2018, was $5,332 and $2,639, respectively.
Long-Lived Assets – Intangible Assets & License Agreement
We account for our intangible assets and long-term license agreement in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Subtopic 350-30, General Intangibles Other Than Goodwill, and ASC Subtopic 360-10-05, Accounting for the Impairment or Disposal of Long-Lived Assets. ASC Subtopic 350-30 requires assets to be measured based on the fair value of the consideration given or the fair value of the assets (or net assets) acquired, whichever is more clearly evident and, thus, more reliably measurable. Further, ASC Subtopic 350-30 requires an intangible asset to be amortized over its useful life and for the useful life to be evaluated every reporting period to determine whether events or circumstances warrant a revision to the remaining period of amortization. If the estimate of useful life is changed the remaining carrying amount of the intangible asset is amortized prospectively over the revised remaining useful life. Costs of internally developing, maintaining, or restoring intangible assets are recognized as an expense when incurred.
In June of 2017 we issued 80,000,000 shares of common stock with a value of $2,256,000 for a 15-year license agreement. Annual amortization over the 15-year life is expected to be $150,400 per year. Amortization recognized for the year ended March 31, 2019 and 2018, was $150,400 and $122,380, respectively, and the long-term license agreement was recorded at a net value of $1,983,220 and $2,133,620 as of March 31, 2019 and 2018, respectively.
In June of 2018 we purchased United Games, LLC and United League, LLC and recorded the transaction as a business combination (see Note 5). Intangible assets acquired in the business combination were recorded at fair value on the date of acquisition and are being amortized on a straight-line method over their estimated useful lives.
| Estimated | ||||||||
| Useful | ||||||||
| Life | ||||||||
| (years) | Value | |||||||
| FireFan mobile application | 4 | $ | 331,000 | |||||
| Back office software | 10 | 408,000 | ||||||
| Tradename/trademark - FireFan | 5 | 248,000 | ||||||
| Tradename/trademark - United Games | 0.45 | 4,000 | ||||||
| Customer contracts/relationships | 5 | 825,000 | ||||||
| 1,816,000 | ||||||||
| Accumulated amortization as of March 31, 2019 | (239,315 | ) | ||||||
| Net book value, March 31, 2019 | $ | 1,576,685 | ||||||
Amortization expense is expected to be as follows:
| Fiscal year ending March 31, 2020 | $ | 338,150 | ||
| Fiscal year ending March 31, 2021 | 338,150 | |||
| Fiscal year ending March 31, 2022 | 338,150 | |||
| Fiscal year ending March 31, 2023 | 280,565 | |||
| Fiscal year ending March 31, 2024 and beyond | 281,670 | |||
| $ | 1,576,685 |
Impairment of Long-Lived Assets
We have adopted ASC Subtopic 360-10, Property, Plant and Equipment. ASC 360-10 requires that long-lived assets and certain identifiable intangibles held and used by us be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable or when the historical cost carrying value of an asset may no longer be appropriate. Events relating to recoverability may include significant unfavorable changes in business conditions, recurring losses, or a forecasted inability to achieve break-even operating results over an extended period.
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2019 AND 2018
We evaluate the recoverability of long-lived assets based upon future net cash flows expected to result from the asset, including eventual disposition. Should impairment in value be indicated, the carrying value of intangible assets will be adjusted and an impairment loss is recorded equal to the difference between the asset’s carrying value and fair value or disposable value.
Fair Value of Financial Instruments
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, based on our principal or, in the absence of a principal, most advantageous market for the specific asset or liability.
U.S. generally accepted accounting principles provide for a three-level hierarchy of inputs to valuation techniques used to measure fair value, defined as follows:
| Level 1: | Inputs that are quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity can access. | |
| Level 2: | Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability, including: |
| - | quoted prices for similar assets or liabilities in active markets; | |
| - | quoted prices for identical or similar assets or liabilities in markets that are not active; | |
| - | inputs other than quoted prices that are observable for the asset or liability; and | |
| - | inputs that are derived principally from or corroborated by observable market data by correlation or other means. |
| Level 3: | Inputs that are unobservable and reflect management’s own assumptions about the inputs market participants would use in pricing the asset or liability based on the best information available in the circumstances (e.g., internally derived assumptions surrounding the timing and amount of expected cash flows). |
Our financial instruments consist of cash, accounts receivable, and accounts payable. We have determined that the book value of our outstanding financial instruments as of March 31, 2019 and March 31, 2018, approximates the fair value due to their short-term nature.
Items recorded or measured at fair value on a recurring basis in the accompanying consolidated financial statements consisted of the following items as of March 31, 2019:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Cryptocurrencies | $ | 142,061 | $ | - | $ | - | $ | 142,061 | ||||||||
| Total Assets | $ | 142,061 | $ | - | $ | - | $ | 142,061 | ||||||||
| Derivative liability | $ | - | $ | 1,358,901 | $ | - | $ | 1,358,901 | ||||||||
| Total Liabilities | $ | - | $ | 1,358,901 | $ | - | $ | 1,358,901 | ||||||||
Items recorded or measured at fair value on a recurring basis in the accompanying consolidated financial statements consisted of the following items as of March 31, 2018:
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Cryptocurrencies | $ | 480,370 | $ | - | $ | - | $ | 480,370 | ||||||||
| Total Assets | $ | 480,370 | $ | - | $ | - | $ | 480,370 | ||||||||
| Total Liabilities | $ | - | $ | - | $ | - | $ | - | ||||||||
Revenue Recognition
Effective April 1, 2018, we adopted the ASC Subtopic 606-10, Revenue from Contracts with Customers. The adoption of ASC 606-10 had no impact on prior year or previously disclosed amounts. In accordance with ASC 606-10, revenue is measured based on a consideration specified in a contract with a customer and recognized when we satisfy the performance obligation specified in each contract.
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2019 AND 2018
The Companymajority of our revenue is generated by subscription sales and payment is received at the time of purchase. Our performance obligation is to provide services over a fixed subscription period; therefore, we recognize revenue ratably over the subscription period and deferred revenue is recorded for the portion of the subscription period subsequent to each reporting date. Additionally, we offer a 10-day trial period to subscription customers, during which a full refund can be requested if a customer does not like the product. Revenues are deferred during the trial period as collection is not probable until that time has passed. Revenues are presented net of refunds, sales incentives, credits, and known and estimated credit card chargebacks.
We generate revenue from the sale of cryptocurrency mining services to our customers through an arrangement with a third-party supplier. Our performance obligation is to arrange for the third-party to provide mining services to our customers and payment is received at the time of purchase, therefore revenue is recognized upon receipt of payment. We recognize revenue in the amount of the fee to which we are entitled to as an agent, or the amount of consideration that we retain after paying the third-party the consideration received in exchange for the services the third-party is to provide.
We generate revenue from the sale of high-speed computer processing equipment that is used for any of the following intense processing activities: protein folding, CGI rendering, game streaming, machine & deep learning, mining, independent financial verification, and general high-speed computing. Our performance obligation is to deliver an equipment package to our customers that includes hardware, software, and firmware and is drop-shipped to a hosting data center. We receive payment at the time of purchase and recognize revenue when the equipment package is delivered and ready for maintenance and hosting, which our customers arrange for, and obtain, from a separate third party that provides such services.
Revenue generated for the year ended March 31, 2019, was as follows:
| Subscription Revenue | Equipment Sales | Cryptocurrency Mining Revenue | Total | |||||||||||||
| Gross billings | $ | 28,518,660 | $ | 698,954 | $ | 5,775,269 | $ | 34,992,883 | ||||||||
| Refunds, incentives, credits, and chargebacks | (1,495,458 | ) | (4,000 | ) | (6,501 | ) | (1,505,959 | ) | ||||||||
| Amounts paid to supplier | - | - | (3,827,843 | ) | (3,827,843 | ) | ||||||||||
| Net revenue | $ | 27,023,202 | $ | 694,954 | $ | 1,940,925 | $ | 29,659,081 | ||||||||
Revenue generated for the year ended March 31, 2018, was as follows:
| Subscription Revenue | Equipment Sales | Cryptocurrency Mining Revenue | Total | |||||||||||||
| Gross billings | $ | 14,758,614 | $ | - | $ | 8,885,798 | $ | 23,644,412 | ||||||||
| Refunds, incentives, credits, and chargebacks | (859,035 | ) | - | - | (859,035 | ) | ||||||||||
| Amounts paid to supplier | - | - | (4,867,945 | ) | (4,867,945 | ) | ||||||||||
| Net revenue | $ | 13,899,579 | $ | - | $ | 4,017,853 | $ | 17,917,432 | ||||||||
Advertising, Selling, and Marketing Costs
We expense advertising, selling, and marketing costs as incurred. Advertising, selling, and marketing costs include costs of promoting our product worldwide, including promotional events. Advertising, selling, and marketing expenses for the years ended March 31, 2019 and 2018, totaled $878,936 and $454,225, respectively.
Income Taxes
We have adopted Accounting Standards Codification subtopicASC Subtopic 740-10, Income Taxes, (“ASC 740-10”) which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statement or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Temporary differences between taxable income reported for financial reporting purposes and income tax purposes consist primarily of derivative liability and stock compensation accounting versus basis differences.
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2019 AND 2018
Net Income (Loss) per Share
The Company follows Accounting Standards Codification subtopicWe follow ASC Subtopic 260-10, Earnings Perper Share, (“ASC 260-10”) specifyingwhich specifies the computation, presentation, and disclosure requirements of earnings per share information. Basic loss per share has been calculated based upon the weighted average number of common shares outstanding. Convertible debt, stock options, and warrants (17,045,455, 35,000, and 6,534,810, respectively, as of March 31, 2017) have been excluded as common stock equivalents in the diluted loss per share because their effect is anti-dilutive on the computation.
Recent Accounting PronouncementsPotentially dilutive securities excluded from the computation of basic and diluted net loss per share are as follows:
| March 31, 2019 | March 31, 2018 | |||||||
| Convertible notes payable | - | - | ||||||
| Options to purchase common stock | 35,000 | 35,000 | ||||||
| Warrants to purchase common stock | 5,052,497 | 6,169,497 | ||||||
| Notes convertible into common stock | 52,162,055 | - | ||||||
| Total | 57,249,552 | 6,204,497 | ||||||
NOTE 3 – RECENT ACCOUNTING PRONOUNCEMENTS
In May 2014,February 2016, the FASB issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with CustomersASU No. 2016-02, “Leases (Topic 606)842)”.ASU 2014-09 creates a new topic in the ASC Topic 606 and establishes a new control-based revenue recognition model,2016-02 changes the basisaccounting for deciding when revenueleased assets, principally by requiring balance sheet recognition of assets under lease arrangements. It is recognized over time or at a point in time, provides new and more detailed guidance on specific topics, and expands and improves disclosures about revenue. In addition, ASU 2014-09 adds a new Subtopic to the Codification, ASC 340-40, Other Assets and Deferred Costs: Contracts with Customers, to provide guidance on costs related to obtaining a contract with a customer and costs incurred in fulfilling a contract with a customer that are not in the scope of another ASC Topic. The guidance in ASU 2014-09 is effective for public entities for annual reporting periods, and interim periods within those years, beginning after December 15, 2016, including interim periods therein. Early application is not permitted. Management is2018. In June of 2019, we signed a three-year lease agreement for office space in Eatontown, New Jersey, therefore we will adopt this standard effective April 1, 2019 and will account for our new lease agreement accordingly. We note that the processadoption of assessing theASU 2016-02 will have no other impact of ASU 2014-09 on the Company’sour consolidated financial statements.
There are no additional recently issued accounting pronouncements that we have not yet adopted that we believe are applicable or would have a material impact on our financial statements.
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2017 AND 2016
2.NOTE 4 – GOING CONCERN AND MANAGEMENT’S LIQUIDITY PLANS
The Company’s consolidatedOur financial statements are prepared using generally accepted accounting principles applicable to a going concern whichthat contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company hasWe have incurred significant recurring losses, which have resulted in an accumulated deficit of $98,868,122,$25,096,983 as of March 31, 2019, along with a net loss fromof $5,011,036 and net cash used in operations of $852,371 and a working capital deficit of $976,307 as of and$2,983,251 for the year ended March 31, 2017 which raises2019. Additionally, as of March 31, 2019, we had a working capital deficit of $2,222,990. These factors raise substantial doubt about the Company’sour ability to continue as a going concern.
Historically we have relied on increasing revenues and new debt financing to pay for operational expenses and debt as it came due. During the year ended March 31, 2017, the Company2019, we raised $92,500$1,905,777 in cash proceeds from the issuance of a notesrelated parties and entering into a based factoring agreement, net of repayments,$4,115,961 in cash proceeds from new lending arrangements. Subsequent to March 31, 2019, we obtained $200,000 in cash proceeds from new lending arrangements and received proceeds$325,000 from the sale of stock of $157,500. Additionally, effective April 1, 2017 in conjunction with a Contribution Agreement dated March 31, 2017,Wealth Generators, LLC became a wholly owned subsidiary of the Company through a reverse-merger and the Company effectively succeeded its operations to Wealth Generators. Subsequent to March 31, 2017Wealth Generators received cash proceeds of $825,000 and $30,000 from new debt and equity financing arrangements, respectively (see Note 13).our common stock.
The Company's primary source
Since our acquisition of operating funds since inception has been cash proceeds from the private placements of common stock and proceeds from private placements of convertible and other debt. However, through Wealth Generators in April of 2017 we have implemented a number of initiatives and we are beginning to see the Company planspositive impact of these actions. First, our largest subsidiary, Kuvera, has a bonus plan structure for distributors of our services which consistently paid out beyond our maximum threshold. Adjustments to reduce obligationsthis bonus plan have been made over the last 12 months with additional adjustments planned for the next two quarters. This resulted in a gradual reduction in bonus payouts which reduced our losses. Second, we expanded the objectives of Investview through the acquisition and fund the Companycreation of additional subsidiaries to increase our sources of income and creating business activities in new sectors which includes:
| ● | Fully licensing SAFE Management LLC as a Registered Investment Advisor and Commodities Trading Advisor. This was done so SAFE Management could offer fully managed trading services to individuals who lacked the time to trade for themselves and provide reasonable advisory fees and minimum investment amounts to service individuals who do not meet the requirements of Qualified Investors. | |
| ● | We acquired the assets of United Games LLC and United League LLC which provided us highly experienced management, programmers, marketing and compliance personnel along with key technology components such as a fully coded back office and trademarked FIREFAN app. We are still in the process of adapting their technology to Kuvera operations and working on various distribution plans for FIREFAN. | |
| ● | We changed the name of our subsidiary WealthGen Global, which was an unused entity, to SAFETek LLC in preparation for our entry into the high-performance computing space to meet the needs of 4IR (Fourth Industrial Revolution) business needs which includes mining, blockchain technologies, gaming, artificial intelligence and 3-Dimensional rendering. This will enable us to provide HPC services to small, medium and startup entities who require specialized high-speed processing but cannot afford the infrastructure. By leasing our processing to these companies, we will aid these entities in bringing their products, inventions, improvements to market. | |
| ● | We have designed a program through Joint Venture known as APEX which enables individuals to purchase highly customized processing cards which SAFETek will lease from the purchasers for a fixed period of time at a fixed monthly lease payment. This enables individuals to participate in emerging growth without experiencing the volatility and potential loss experienced in the sector. |
These companies provide Investview a stake in 4IR, HPC, app development, fintech, blockchain and personal money management sectors. Each of these are areas that are targeted for significant growth spurred by innovations through technology.
While our liabilities are larger than our assets it is important to note that we seek to keep operating expenses low. The assets we have acquired and will continue to seek out are those of technology, mobile apps, and human resources. These assets are not easily defined on our balance sheet but represent our ability to carry out our objectives which we believe will ultimately generating positive cash flow, provided by operations. The Company also intendsreduced debt and then profitability.
Further, while we have reported reoccurring losses and have an operating capital deficiency, we have been able to raise additionalestablish multiple companies to create various revenue streams as we move forward. Our largest challenge is operational cash flow as lending arrangements continue to be expensive causing us to deploy incoming cash to prior debt. We continue to seek short term capital through private placementsin arrangements that are partnership based with elements of debt and equity securities, but there can be no assurance that these funds will be available on terms acceptable tocombined. Additionally, our immediate focus is the Company, or will be sufficient to enable the Company to fully complete its development activities. If the Company is unable to fund the Company through operations or raise sufficientcontinued reduction in losses by controlling expenses, increasing revenue, and generating additional funds, it will have to develop and implement a plan to further extend payables, reduce overhead, or scale back its current business plan until sufficient additional capital is raised to support increased operations. There can be no assurance that such a plan will be successful.revenue streams.
Accordingly, the accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, (“GAAP”), which contemplate our continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.
INVESTVIEW, INC.
3. SETTLEMENT PAYABLENOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2019 AND 2018
On January 20, 2009,NOTE 5 – ACQUISITIONS
Reverse Acquisition with Wealth Generators
Effective April 1, 2017, we entered into a Contribution Agreement with Wealth Generators, pursuant to which the Company received $200,000Wealth Generators members agreed to contribute 100% of the outstanding securities of Wealth Generators in exchange for an aggregate of 1,358,670,942 shares of our common stock. Following the closing, Wealth Generators became our wholly owned subsidiary and the Wealth Generators members became our stockholders and control the majority of our outstanding common stock.
The transaction was accounted for as a promissory note, payable, due July 20, 2009reverse acquisition using the acquisition method of accounting in accordance with interest due monthly at 20% per annum.ASC Topic 805. Wealth Generators is the acquirer solely for financial accounting purposes. The note was secured by common stock offollowing table summarizes the Company and was personally guaranteed by certain officers ofpurchase accounting for the Company. The note contained certain first right of payment should the Company be successful in raising $500,000 to $1,500,000 in a Private Placement Offering before any payments could be distributed from the escrow at the offering. In connection with the issuance of the promissory note payable, the Company issued warrants to purchase its common stock at $2.00 per share for five years. The fair value of the warrantsassets acquired and liabilities assumed at the date of $101,183, representing debt discount, has been fully amortized.the reverse acquisition:
| Cash | $ | 3,550 | ||
| Receivables | 150,000 | |||
| Total assets acquired | 153,550 | |||
| Accounts payable and accrued liabilities | 456,599 | |||
| Due to former management | 127,199 | |||
| Debt | 26,314 | |||
| Total liabilities assumed [1] | 610,112 | |||
| Net liabilities assumed | 456,562 | |||
| Consideration [2] | 662,047 | |||
| Goodwill | $ | 1,118,609 |
| [1] | In conjunction with the reverse acquisition, we entered into an assignment and assumption agreement wherein we issued 24,914,348 shares of our common stock to Alpha Pro Asset Management Group, LLC (“Alpha Pro”), an entity affiliated with the prior members of management, in exchange for Alpha Pro’s assumption of $482,588 in liabilities. Accordingly, the shares issued for debt were accounted for the moment before the reverse acquisition, and the $482,588 in liabilities have been excluded from the total liabilities assumed shown here. | |
| [2] | The fair value of the consideration effectively transferred was measured based on the fair value of 150,465,339 shares that were outstanding immediately before the transaction. Using the closing market price of $0.0044 per share on March 31, 2017, consideration was valued at $662,047. |
Acquisition of United Games, LLC and United League, LLC
On August 12, 2013, Evenflow Funding,July 20, 2018, we entered into a Purchase Agreement with United Games Marketing LLC, ("Evenflow") commenced a civil action (the “NJ Action”) against the Company in the Superior CourtUtah limited liability company, to purchase its wholly owned subsidiaries United Games, LLC and United League, LLC for 50,000,000 shares of New Jersey, Law Division, Monmouth County (the "Court") bearing Docket No.. Mon-L-3105-13 in collectionour common stock. United Games, LLC and United League, LLC provide distributor marketing back-office and commission tools and online sports gaming experience for users of the above described promissory note issued January 20, 2009 and related accrued interest.
On October 13, 2014, the Company and Evenflow agreedtheir applications distributed through their networks of affiliates therefore we expect significant synergies to a settlement and a Stipulation of Settlement (the "Settlement") was filed with the Court, in connection with the NJ Action. Pursuant to the Settlement, the Company agreed to pay to Evenflow a total of $425,000 (the "Settlement Amount") in quarterly payments (the "Quarterly Payments") equal to 10% of the net revenue (revenue less allowances, returns and payments to revenue sharing agreements) of the Company as reported in the Company's periodic reports filed on Form 10-Q or Form 10-K (collectively, the "Periodic Reports") commencing with the Company's December 31, 2014 Periodic Report. The Quarterly Payments are due and payable by the Company on the tenth day following the filing of each Periodic Report. In addition to the Quarterly Payments, the Company agreed to make an initial payment in the amount of $25,000 upon the filing of the Settlement with the Court, as wellexist as a payment in the amountresult of $25,000 due on the 12 month anniversary of the initial payment. The aggregate total of all payments including the upfront $25,000, the one year anniversary $25,000, and the quarterly payments is to be $425,000.combining operations.
As of March 31, 2016, the Company reclassified the promissory note and accrued interest to settlement payable. No material gain or loss was recorded in connection with the settlement. The unpaid balance as of March 31, 2017 and 2016 was $344,392. As of March 31, 2017 the Company was in default on this liability, however, in conjunction with the Wealth Generators reverse-merger, effective April 1, 2017, this liability was assigned and assumed by Alpha Pro Asset Management Group, LLC, an entity associated with the former management of the Company (see Note 13).
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 20172019 AND 20162018
4.The transaction was accounted for as a business combination using the acquisition method of accounting in accordance with the FASB (ASC Topic 805). The following table summarizes the purchase accounting for the fair value of the assets acquired and liabilities assumed at the date of the acquisition and the gain on bargain purchase which resulted from the fair value of the intangible assets acquired exceeding the fair value of our common stock given as consideration:
| Cash | $ | 3,740 | ||
| Receivables | 361,345 | |||
| Intangible assets (see Note 2) | 1,816,000 | |||
| Total assets acquired | 2,181,085 | |||
| Accounts payable and accrued liabilities | 409,803 | |||
| Total liabilities assumed | 409,803 | |||
| Net assets acquired | 1,771,282 | |||
| Consideration [1] | 800,000 | |||
| Gain on bargain purchase | $ | 971,282 |
| [1] | The 50,000,000 shares of our common stock transferred as consideration in accordance with the Purchase Agreement was valued on July 20, 2018, the date of acquisition, based on the weighted equity fair value of $0.016 per share as determined by a third party valuation firm. |
United Games, LLC and United League, LLC recorded combined revenue of $1,331,542 and a combined net income of $26,059 since the July 20, 2018 acquisition date, which were included in our consolidated statement of operations for the year ended March 31, 2019.
The table below represents the pro forma revenue and net income (loss) for the years ended March 31, 2019 and 2018, assuming the acquisition had occurred on April 1, 2017, pursuant to ASC Subtopic 805-10-50. This pro forma information does not purport to represent what the actual results of our operations would have been had the acquisition occurred on this date nor does it purport to predict the results of operations for future periods:
| Year Ended March 31, | ||||||||
| 2019 | 2018 | |||||||
| Revenues | $ | 27,961,351 | $ | 19,416,537 | ||||
| Net (loss) | $ | (5,288,735 | ) | $ | (16,371,058 | ) | ||
| Loss per common share | $ | (0.00 | ) | $ | (0.01 | ) | ||
NOTE 6 – RELATED PARTY PAYABLESTRANSACTIONS
Summary of outstandingOur related party payables consisted of the following:
| Year Ended March 31, | ||||||||
| 2019 | 2018 | |||||||
| Short-term advances [1] | $ | 440,489 | $ | 1,880 | ||||
| Short-term promissory note entered into on 8/17/18 [2] | 105,000 | - | ||||||
| $ | 545,489 | $ | 1,880 | |||||
| [1] | We periodically receive advances for operating funds from our current majority shareholders (former members of Wealth Generators prior to the reverse acquisition) and other related parties, including entities that are owned, controlled, or influenced by our owners or management. These advances are due on demand, generally have no set interest rates associated with them, and are unsecured. During the year ended March 31, 2019, we received $1,805,777 in cash proceeds from advances, incurred $15,000 in interest, and repaid related parties a total of $1,382,168. | |
| [2] | A member of the senior management team advanced funds of $100,000 on August 17, 2018, under a short-term promissory note due to be repaid on August 31, 2018. On August 31, 2018 the note was amended to be due on demand or, in absence of a demand, due on August 31, 2019. The note had a fixed interest payment of $5,000, which was recorded as interest expense in the statement of operations during the year ended March 31, 2019. |
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2019 AND 2018
In addition to the above-mentioned related-party lending arrangements, during the year ended March 31, 2019, we sold $41,500 worth of high-speed computer processing equipment to our chief executive officer. This revenue has been included in the equipment sales reported on our statement of operations.
NOTE 7 – DEBT
Our debt consisted of the following:
| Year Ended March 31, | ||||||||
| 2019 | 2018 | |||||||
| Revenue share agreement entered into on 6/28/16 [1] | $ | - | $ | 195,245 | ||||
| Short-term advance received on 8/31/18 [2] | 75,000 | - | ||||||
| Secured merchant agreement for future receivables entered into on 2/14/19 [3] | 641,687 | - | ||||||
| Secured merchant agreement for future receivables entered into on 2/14/19 [4] | 468,790 | - | ||||||
| Secured merchant agreements for future receivables entered into on 2/14/19 [5] | 597,060 | - | ||||||
| Promissory note entered into on 1/16/19 [6] | 60,000 | - | ||||||
| Secured merchant agreements for future receivables entered into on 3/28/19 [7] | 25,650 | - | ||||||
| Convertible promissory note entered into on 1/11/19 [8] | 26,600 | - | ||||||
| Convertible promissory note entered into on 2/6/19 [9] | 76,686 | - | ||||||
| Convertible promissory note entered into on 3/14/19 [10] | 5,557 | - | ||||||
| $ | 1,977,030 | $ | 195,245 | |||||
| [1] | During April 2016, we entered into a Royalty Agreement, which was replaced with a Revenue Share Agreement dated June 28, 2016, which was amended in October of 2016. Cash receipts were received of $100,000, $150,000, and $250,000 on April 19, May 11, and June 29, 2016, respectively. In accordance with the terms of the final amended agreement, we are required to make payments of $25,000 per month or a 3% royalty for the previous month’s sales, whichever is greater, beginning February 15, 2017, until the lender has been repaid $600,000. During the year ended March 31, 2019, we repaid $195,245. | |
| [2] | In August 2018, we received a $75,000 short-term advance. The advance is due on demand, has no interest rate, and is unsecured. | |
| [3] | During September 2018, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access to working capital. On September 28, 2018, we received proceeds from this arrangement of $570,000. In accordance with the terms of the agreement, we were required to repay $839,400 by making ACH payments in the amount of 10% of our daily cash receipts. Accordingly, we recorded $269,400 as a debt discount at the inception of the agreement, which was the difference between the funds received and the amount that was to be repaid. In February 2019 we replaced this agreement with a new Secured Merchant Agreement (see below), therefore transferring $233,501 of amounts owed to a new agreement. However, prior to the terminating the September agreement, we made payments of $605,899 and amortized $269,400 into interest expense. | |
| During January 2019, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access to working capital. On January 11, 2019, we received proceeds from this arrangement of $349,851. In accordance with the terms of the agreement, we were required to repay $489,650 by making daily ACH payments of $1,000 for the first 30 days following the date of the agreement and daily ACH payments of $2,999 thereafter. Accordingly, we recorded $139,799 as a debt discount at the inception of the agreement, which was the difference between the funds received and the amount that was to be repaid. In February 2019 we replaced this agreement with a new Secured Merchant Agreement (see below), therefore transferring $449,657 of amounts owed to a new agreement. However, prior to the terminating the January agreement, we made payments of $39,993 and amortized $139,799 into interest expense. | ||
| During February 2019, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access to working capital. On February 15, 2019, we received proceeds from this arrangement of $73,801 after paying off $233,501 from a September 2018 agreement (see above) and $449,657 from a January 2019 agreement (see above). In accordance with the terms of the agreement, we are required to repay $909,350 by making daily ACH payments of $5,049. Accordingly, we recorded $152,391 as a debt discount at the inception of the agreement, which was the difference between the funds received plus the earlier debt paid off, and the amount that was to be repaid. During the year ended March 31, 2019, we repaid $141,372 and amortized $26,100 into interest expense. |
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2019 AND 2018
| [4] | During December 2018, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access to working capital. On December 17, 2018, we received proceeds from this arrangement of $380,000. In accordance with the terms of the agreement, we were required to repay $559,600 by making daily ACH payments of $3,000. Accordingly, we recorded $179,600 as a debt discount at the inception of the agreement, which was the difference between the funds received and the amount that was to be repaid. In February 2019 we replaced this agreement with a new Secured Merchant Agreement (see below), therefore transferring $421,600 of amounts owed to a new agreement. However, prior to the terminating the December agreement, we made payments of $138,000 and amortized $179,600 into interest expense. | |
| During February 2019, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access to working capital. On February 15, 2019, we received proceeds from this arrangement of $126,932 after paying off $421,600 from a December 2018 agreement (see above). In accordance with the terms of the agreement, we are required to repay $840,000 by making daily ACH payments of $4,649. Accordingly, we recorded $291,468 as a debt discount at the inception of the agreement, which was the difference between the funds received plus the earlier debt paid off, and the amount that was to be repaid. During the year ended March 31, 2019, we repaid $129,388 and amortized $49,646 into interest expense. | ||
| [5] | During October 2018, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access to working capital. During October 2018, we received proceeds from this arrangement of $77,260. In accordance with the terms of the agreement, we were required to repay $699,500 by making daily ACH payments of $4,372. Accordingly, we recorded $224,500 as a debt discount at the inception of the agreement, which was the difference between the funds received and the amount that was to be repaid. In February 2019 we replaced this agreement with a new Secured Merchant Agreement (see below), therefore transferring $327,880 of amounts owed to a new agreement. However, prior to the terminating the October agreement, we made payments of $371,620 and amortized $224,500 into interest expense. | |
| During February 2019, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access to working capital. On February 15, 2019, we received proceeds from this arrangement of $126,932 after paying off $327,880 from an October 2018 agreement (see above). In accordance with the terms of the agreement, we are required to repay $629,550 by making daily ACH payments of $3,498. Accordingly, we recorded $224,410 as a debt discount at the inception of the agreement, which was the difference between the funds received plus the earlier debt paid off, and the amount that was to be repaid. Also during February 2019, we entered into a second Secured Merchant Agreement with this same entity, receiving proceeds of $288,000. In accordance with the terms of the agreement, we are required to repay $419,700 by making daily ACH payments of $2,332. Accordingly, we recorded $131,700 as a debt discount at the inception of the agreement, which was the difference between the funds received and the amount that was to be repaid. During the year ended March 31, 2019, we repaid $157,410 on these two agreements and amortized $61,330 into interest expense. | ||
| [6] | In January 2019, we received funds of $631,617 and repaid $511,617 in a series of transactions representing short-term advances. On January 16, 2019, we entered into a short-term promissory note for the resulting $120,000 owed as a result of the transactions. The note had a zero percent interest rate and was due within the shorter of three months or the receipt of cash from a $1 million financing arrangement. Subsequent to January 16, 2019, we repaid $60,000 of the amount due under the note. | |
| [7] | During March 2019, we entered into a Secured Merchant Agreement for future receivables with an entity that provides quick access to working capital. On March 29, 2019, we received proceeds from this arrangement of $28,500. In accordance with the terms of the agreement, we were required to repay $45,000 by making daily ACH payments of $4,500. Accordingly, we recorded $16,500 as a debt discount at the inception of the agreement, which was the difference between the funds received and the amount that was to be repaid. During the year ended March 31, 2019, we repaid $4,500 and amortized $1,650 into interest expense. | |
| [8] | In January 2019, we entered into a Convertible Promissory Note and received proceeds of $135,000 after incurring loan fees of $3,000. The note incurs interest at 12% per annum and has a maturity date of April 11, 2020. The Convertible Promissory Note has a variable conversion rate that is 65% of the lowest closing price during the previous 15-trading-day period, subject to adjustment. Therefore, the conversion feature is accounted for as a derivative instrument (see Note 8). At inception, we recorded a debt discount of $138,000 and captured loan fees, recorded as interest expense, of $450,005. During the year ended March 31, 2019, we recorded amortization of the debt discount of $23,152 into interest expense and recorded additional interest expense on the note of $3,448. |
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2019 AND 2018
| [9] | In February 2019, we entered into a Convertible Promissory Note and received proceeds of $240,000. The note was issued with a $30,000 original issue discount and loan fees of $3,000, incurs interest at 12% per annum, and has a maturity date of August 6, 2019. In accordance with the terms of the note, we issued 22,500,000 shares of common stock (the “Returnable Shares”) to the note holder as a commitment fee (see Note 9), provided, however, the Returnable Shares must be returned to us if the note is fully repaid and satisfied prior to the date which is 180 days following the issue date. The Convertible Promissory Note has a variable conversion rate that is 65% of the lowest trading price during the previous 20-trading-day period, subject to adjustment. Therefore, the conversion feature is accounted for as a derivative instrument (see Note 8). We allocated the proceeds of the note to the common stock issued and to the fair value of the note, taking into consideration the fair value of the conversion feature. As a result, the common stock was valued at $69,871, we recorded a debt discount of $270,000, and captured loan fees, recorded as interest expense, of $120,128. During the year ended March 31, 2019, we recorded amortization of the debt discount of $72,514 into interest expense and recorded additional interest expense on the note of $4,172. | |
| [10] | In March 2019, we entered into a Convertible Promissory Note and received proceeds of $135,000 after incurring loan fees of $3,000. The note incurs interest at 12% per annum and has a maturity date of June 14, 2020. The Convertible Promissory Note has a variable conversion rate that is 65% of the average of the two lowest closing prices during the previous 15-trading-day period, subject to adjustment. Therefore, the conversion feature is accounted for as a derivative instrument (see Note 8). At inception, we recorded a debt discount of $138,000 and captured loan fees, recorded as interest expense, of $64,492. During the year ended March 31, 2019, we recorded amortization of the debt discount of $4,831 into interest expense and recorded additional interest expense on the note of $726. |
In addition to the above debt transactions that were outstanding as of March 31, 20172019 and 2016 is as follows:
| 2017 | 2016 | |||||||
| Note payable, due July 31, 2015 [1] | $ | - | $ | 95,000 | ||||
| Convertible notes payable, due June 30, 2017 [2] | - | 258,799 | ||||||
| Accrued interest | - | 45,010 | ||||||
| Advances [3] | 127,199 | 127,573 | ||||||
| Accrued salaries and wages [4] | 5,000 | 472,960 | ||||||
| Total | 132,199 | 999,342 | ||||||
| Less: Short term portion | 132,199 | 704,241 | ||||||
| Long term portion | $ | - | $ | 295,101 | ||||
2018, during the year ended March 31, 2019, we also received proceeds of $530,000 from short-term notes. During the year ended March 31, 2016,2019, we recorded interest expense of $51,000 for fixed interest amounts due on the Companynotes and made total cash payments in aggregate of $25,000 towards$581,000 to extinguish the interest and principal ofamounts due on the note. During the year ended March 31, 2017 the Company issued 2,082,680 shares of common stock for $95,000 of note principal and $12,287 of accrued interest to reduce this liability to zero.
On August 12, 2012, the Company issued a $100,000 convertible promissory note with interest at 8% per annum, due August 12, 2015 to the Company’s former COO. The note is convertible into the Company’s common stock at $4.00 per share. In connection with the issuance of the note, the Company issued 12,500 warrants to purchase the Company’s common stock at $6.00 per share over five years. On June 30, 2014, the Company exchanged the convertible note and warrants to acquire the Company’s common stock for new convertible note and warrants.notes.
In exchange for the above two notes, during the fiscal year ending March 31, 2015, the Company issued an aggregate of $258,799 related party notes in exchange for maturing notes and accrued interest that mature June 30, 2017 in exchange for the cancellation of $200,000 previously issued convertible notes, accrued interest of $35,260 and an incentive of $23,539. The Promissory Notes bears interest at a rate of 8% and can be convertible into 258,799 shares of the Company’s common stock, at a conversion rate of $1.00 per share. Interest will also be converted into common stock at the conversion rate of $1.00 per share.
In connection with the issuance of the new promissory notes, the Company issued detachable warrants granting the holder the right to acquire an aggregate of 258,799 shares of the Company’s common stock at $1.50 per share, net cancellation of previously issued 25,000 warrants to acquire the Company’s stock at $6.00 . The new warrants expire five years from the issuance.NOTE 8 – DERIVATIVE LIABILITY
During the year ended March 31, 20172019, we had the Company issued 6,211,200 shares offollowing activity in our derivative liability account:
| Derivative liability at March 31, 2018 | $ | - | ||
| Derivative liability recorded on new instruments | 1,144,525 | |||
| Change in fair value | 214,376 | |||
| Derivative liability at March 31, 2019 | $ | 1,358,901 |
We use the binomial option pricing model to estimate fair value for those instruments convertible into common stock, for $258,799 of note principalat inception, at conversion date, and $51,902 of accrued interest to reduce this liability to zero.
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2017 AND 2016
5. DEBT
Summary of outstanding debt as of March 31, 2017 and 2016 is as follows:
| 2017 | 2016 | |||||||
| Note payable, due December 31, 2015 [1] | $ | - | $ | 33,333 | ||||
| Notes payable, due December 31, 2016, in default [1] | 10,000 | 86,667 | ||||||
| Note payable, due September 2016, in default [2] | 8,731 | 30,399 | ||||||
| Convertible note payable, due December 31, 2016, in default [3] | 45,000 | - | ||||||
| Convertible note payable, due September 25, 2017, net of unamortized debt discount of $0 and $23,106, respectively [4] | - | 10,494 | ||||||
| Convertible note payable, due November 13, 2016, net of unamortized debt discount of $0 and $21,708, respectively [5] | - | 13,292 | ||||||
| Convertible notes payable, due August 31, 2016, net of unamortized debt discount of $0 and $129,523, respectively [6] | - | 30,477 | ||||||
| Convertible Promissory notes due June 30, 2017 [7] | - | 1,317,861 | ||||||
| Accrued interest | 9,280 | 255,127 | ||||||
| Total | 73,011 | 1,777,650 | ||||||
| Less: Short term portion | (73,011 | ) | (378,460 | ) | ||||
| Long term portion | $ | - | $ | 1,399,190 | ||||
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2017 AND 2016
On May 25, 2016 the Company amended the Note such that the holder waived all events of default that existed and the Note principal increased by $21,875.at each reporting date. During the year ended March 31, 20172019, the Company paid $7,500assumptions used in our binomial option pricing model were in the following range:
| Risk free interest rate | 2.40% - 2.58 | % | ||
| Expected life in years | 0.35 - 1.25 | |||
| Expected volatility | 222% - 268 | % |
NOTE 9 – STOCKHOLDERS’ EQUITY
Preferred Stock
We are authorized to settle this amount and $14,375 was recorded as a gain on settlement. On May 31, 2016 the Company replaced the Noteissue up to 10,000,000 shares of preferred stock with a new note entered intopar value of $0.001 and our board of directors has the authority to issue one or more classes of preferred stock with Azoth Fund, LLC for $73,500 after receiving $32,500 in cash proceeds and recording $6,500 in interest expense at inception. The Azoth Note has an original issue discountrights senior to those of $3,500, bears interest at the rate of 8% per annum, is due 12 months from the date of issuance, and is convertible into common stock at a conversion priceand to determine the rights, privileges, and preferences of that is 50% multiplied by the lowest market pricepreferred stock, which has not yet been done. As of the previous 20 trading prices.March 31, 2019 and 2018, we had no preferred stock issued or outstanding.
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2019 AND 2018
Common Stock Transactions
During the year ended March 31, 2017 $21,1762019, we issued 50,000,000 shares of common stock for the acquisition of United Games, LLC and United League, LLC (see Note 5). We also issued 1,000,000 shares of common stock in August and 1,000,000 shares of common stock in March, valued at $10,000 and $17,600, respectively, based on the market price on the day of issuance, to an employee for compensation. The shares are subject to forfeiture if the employee is not in good standing six months after the date of issuance. During the year ended March 31, 2019, the $10,000 was recognized as expense and of the principal of this note$17,600 we recognized $2,933 as an expense and $14,667 was converted into 19,006,000recorded as a prepaid asset. Also during the year ended March 31, 2019, we issued 400,000,000 shares of the Company’s common stock andwith a value of $6,760,000 based on the Company paid back $67,000 in cashmarket price on the date of issuance, for an agreement to reduce the liabilitypartner with a third party to zero.
In connection with the issuance of the convertible promissory notes, the Company issued detachable warrants granting the holder the rightgenerate future revenues. The 400,000,000 shares are subject to acquire an aggregate of 320,000 shares of the Company’s common stock at $0.50 per share and expire 2forfeiture for five years from the date of issuance. The Company determinedissuance, such that shares will be deemed earned upon meeting certain milestones. We are recognizing the conversion featureexpense ratably over the five-year term and recorded $96,307 in each ofexpense during the notes required classification as an embedded derivative. The accounting treatment requires that the Company record at fair value at inceptionyear ended March 31, 2019, while recording $6,663,693 as a liability. The determined fair value exceededprepaid asset as of March 31, 2019. During the netyear ended March 31, 2019, we entered into a common stock purchase agreement that provides cash of $1,000,000 in exchange for shares of our common stock. In conjunction with that agreement, we issued 3,000,000 shares of common stock that was accounted for as offering costs, increasing common stock by $3,000 and decreasing additional paid-in capital by $3,000, to offset any proceeds received, therefore no valuefrom the future equity transactions resulting from the agreement. During the year ended March 31, 2019, we issued 22,500,000 shares as a commitment fee in conjunction with a debt arrangement, whereby the shares were assigned tovalued at $69,871 based on the issued detachable warrants as described in ASC 470-20.allocation of debt proceeds (see Note 7). Also during the year ended March 31, 2019, we repurchased 7,000,000 shares of common stock for $91,000.
During the year ended March 31, 2017 $160,000 of the principal was converted into 3,200,000 shares of the Company’s common stock to reduce the liability to zero.
In connection with the issuance of the promissory notes, the Company2018, we issued detachable warrants granting the holder the right to acquire an aggregate of 1,603,121 shares of the Company’s common stock at $1.50 per share, net cancellation of previously issued 150,000 warrants to acquire the Company’s stock at $6.00. The new warrants expire five years from the issuance. The Company did not record an embedded beneficial conversion feature in the notes since the fair value of the common stock did not exceed the conversion rate at the date of issuance.
In connection with the exchange, the Company recorded an aggregate loss on settlement of debt of $1,588,616 comprised of $1,442,805 representing the fair value of the issued warrants and $145,811 representing the above described incentive. The Company valued the warrants using the Black-Scholes pricing model and the following assumptions: contractual terms of 5 years, an average risk free interest rate of 1.62%, a dividend yield of 0%, and volatility of 422.71%.
During the year ended March 31, 2016, one note for $100,000 previously settled as described above was disputed. Therefore, the original note, currently in default, was restored as originally recorded and related warrants exchanged were cancelled. The repayment of this note is currently being renegotiated.
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2017 AND 2016
During the year ended March 31, 2017 $1,317,861 of the non-related party principal and $277,226 of the accrued interest related to the notes was converted into 31,954,444 shares of the Company’s common stock to reduce the liabilities to zero.
In addition to the above, the following liabilities were paid off during the year ended March 31, 2016 or were entered into and paid off during the year ended March 31, 2017, thus were not included in the table above.
Vis Vires Group, Inc.
On August 27, 2015, the Company entered into a Securities Purchase Agreement with Vis Vires Group, Inc. ("Vis Vires") for the sale of 8% convertible note in the principal amount of $114,000 (the “Vis Vires Note”). The total net proceeds the Company received from these offerings was $110,000, net of fees of $4,000.
The Vis Vires Note bears interest at the rate of 8% per annum and is due May 31, 2016 and is convertible into common stock, at Vis Vires’s option, at a 65% discount to the average of the three lowest closing bid prices of the common stock during the 10 trading day period prior to conversion. On February 26, 2016, the Company paid the total outstanding balance of $114,000 plus accrued interest therefore the note had a $0 balance as of March 31, 2017 and 2016.
At note payoff, February 26, 2016, the Company reclassified the determined fair value of the embedded derivative of $162,190 to equity. The fair value of the derivative was determined using the Binomial Option Pricing Model based on the following assumptions: (1) dividend yield of 0%; (2) expected volatility of 413.62%, (3) weighted average risk-free interest rate of 0.33%, (4) expected life of 0.26 years, and (5) estimated fair value of the Company’s common stock of $0.139 per share.
Bartonek
On April 5, 2016, the Company issued a $15,000 convertible promissory note to Joseph Bartonek, Jr. bearing interest at 12% per annum due upon maturity along with principal on August 31, 2016. The convertible promissory note is convertible, at the holders’ option, at $0.10 per share at any time, the due date or the time of a $5 million equity event, as defined.
In connection with the issuance of the convertible promissory note, the Company issued detachable warrants granting the holder the right to acquire 30,000 shares of the Company’s common stock at $0.50 per share and expire 2 years from the date of issuance. The Company determined that the conversion feature in the note required classification as an embedded derivative. The accounting treatment requires that the Company record at fair value at inception as a liability. The determined fair value exceeded the net proceeds received, therefore no value was assigned to the issued detachable warrants as described in ASC 470-20.
During the year ended March 31, 2017 $15,000 of the principal was converted into 300,000 shares of the Company’s common stock to reduce the liability to zero.
6. DERIVATIVE LIABILITIES
As described in Note 5, the Company issued convertible notes that contain conversion features and reset provision. The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date and to fair value as of each subsequent reporting date. During the years ending March 31, 2017 and 2016, the Company had the following activity in their derivative liability account:
| Derivative liability at March 31, 2015 | $ | - | ||
| Derivative liability recorded on new instruments | 674,828 | |||
| Elimination of derivative liability on conversion | (6,891 | ) | ||
| Reclass derivative liability to equity upon convertible note payoff | (162,190 | ) | ||
| Change in fair value of derivative liability | (246,939 | ) | ||
| Derivative liability at March 31, 2016 | 258,808 | |||
| Derivative liability recorded on new instruments | 286,340 | |||
| Elimination of derivative liability on conversion | (128,490 | ) | ||
| Reclass derivative liability to equity upon convertible note payoff | (277,778 | ) | ||
| Gain on settlement | (17,439 | ) | ||
| Change in fair value of derivative liability | (84,284 | ) | ||
| Derivative liability at March 31, 2017 | $ | 37,157 |
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2017 AND 2016
The Company recorded the aggregate fair value of $674,828 of embedded derivatives on their notes entered into during the year ended March 31, 2016, which was determined using the Binomial Option Pricing Model based on the following assumptions: (1) dividend yield of 0%; (2) expected volatility of 225.82% to 413.63%, (3) weighted average risk-free interest rate of 0.36 % to 0.70%, (4) expected life of 0.76 to 2.00 years, and (5) estimated fair value of the Company’s common stock of $0.129 to $0.31 per share. The determined fair value of the debt derivatives of $674,828 was charged as a debt discount up to the net proceeds of the notes with the remainder of $343,827 charged to current period operations as non-cash interest expense.
At March 31, 2016, the Company marked to market the fair value of the debt derivatives and determined a fair value of $258,808. The Company recorded a gain from change in fair value of debt derivatives of $246,939 for the year ended March 31, 2016. The fair value of the embedded derivatives was determined using Binomial Option Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 412.94%, (3) weighted average risk-free interest rate of 0.39% to 0.59%, (4) expected life of 0.42 to 1.49 years, and (5) estimated fair value of the Company’s common stock of $0.10 per share.
During the year ended March 31, 2017 the Company recorded an aggregate fair value of $333,996 of embedded derivatives on their new notes entered into which was determined using the Binominal Option Pricing Model with the following assumptions: (1) dividend yield of 0%; (2) expected volatility of 413.63% to 451.23%, (3) weighted average risk-free interest rate of 0.40 % to 0.68%, (4) expected life of 0.42 to 1.00 years, and (5) estimated fair value of the Company’s common stock of $0.009 to $0.10 per share.
At March 31, 2017, the Company marked to market the fair value of the debt derivatives and determined a fair value of $37,157. The Company recorded a gain from change in fair value of debt derivatives of $84,284 for the year ended March 31, 2017. The fair value of the embedded derivatives was determined using Black-Scholes Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 237.35%, (3) weighted average risk-free interest rate of 0.74%, (4) expected life of 0.12 years, and (5) estimated fair value of the Company’s common stock of $0.0044 per share.
7. CAPITAL STOCK
During the year ended March 31, 2017 the Company issued 10,670,840267,127,500 shares of common stock in exchange for $157,500net proceeds of cash proceeds. The Company$2,495,338. We issued 6,072,200125,000 shares of common stock with a value of $31,775$7,500 for legala one-year consulting agreement, 80,000,000 shares of common stock with a value of $2,256,000 for a 15-year license agreement, and 94,250,333 shares of common stock with a value of $6,719,734 for consulting services,and service agreements; of which $18,390 wasthe value of the shares issued for current year services and $173,647the license agreement $6,846,060 was for services incurred in previous periods, thereforerecorded as expense, $3,555 was recorded as a prepaid asset, and $2,133,620 was recorded as a long-term license agreement during the Company recorded a gain on settlement of debt for $160,262. The Companyyear ended March 31, 2018. We also issued 21,069,580 and 400,000239,575,884 shares of stock valued at $983,735 and $25,800 for compensation and director fees, respectively, of which $536,575 was for current year services and $472,960 was for amounts previously accrued. The Company also issued 72,709,924 shares of itsour common stock in settlement of debt, wherein accrued liabilities, principal, accrued interest, and derivative liabilities were extinguished in the amounts of $1,994,362, $414,160,$435,892, $2,348,606, $20,696, and $128,490,$38,557, respectively, and the Companywe recognized a gainloss on the settlement of debt in the amount of $2,163,813. The Company also wrote off$3,186,394 in the statement of operations for the year ended March 31, 2018. In conjunction with the shares issued for the settlement of debt, a gain of $413,012 related to the period prior to the reverse acquisition with Wealth Generators was excluded from the statement of operations. As a result of the reverse acquisition, we issued 1,358,670,942 shares of common stock (see Note 5). During the year ended March 31, 2018, we entered into an equity distribution agreement that provides for cash advances up to $5,000,000 in exchange for shares of our common stock, to be fulfilled at our request. Pursuant to that agreement, we issued 4,273,504 shares of common stock as a commitment fee, recorded a liability of $250,000 worthfor future commitment fees to be paid, and paid cash of Common Stock Subscription Receivable$15,000 for due diligence costs. As a result, common stock increased $4,274 and additional paid-in capital decreased by $269,274 to Additional Paidoffset any proceeds from future equity transactions resulting from the agreement. During the year ended March 31, 2018, we cancelled 250,000 shares of common stock and 1,300 shares of treasury stock, resulting in Capitala decrease in common stock of $251, a decrease in additional paid-in capital of $8,338, and a decrease in treasury stock of $8,589.
In conjunction with the sale of common stock during the year ended March 31, 2017 due2018, we provided a guarantee to certain individuals such that we would issue additional shares of our common stock if the amounts being uncollectible.
average closing price of our common stock fell below $0.02 per share on the 20 days preceding the 18-month anniversary of the date the shares were originally sold. As a result of this guarantee, we had recorded $626,388 in accounts payable and accrued liabilities on our balance sheet as of March 31, 2018. During the year ended March 31, 20162018, the Company issued 331,835 shares of18-month anniversary passed without the common stock for legal and consulting services valued at $92,985, which representedfalling below the value of the services received and which did not differ materiallyset threshold, therefore, we were released from the value ofguarantee, and we increased additional paid-in capital by $525,000 to remove the stock issued. The Company also issued 100,000 shares of its common stock in settlement of $3,000 of convertible notes payable.previously recorded offering costs.
As of March 31, 20172019 and 2016, the Company2018, we had 125,889,4552,640,161,318 and 14,966,9112,169,661,318 shares of common stock issued and 125,888,155outstanding, respectively.
Employee Stock Options
The nonqualified plan adopted in 2007 authorizes 65,000 shares, of which 47,500 have been granted as of March 31, 2019. The qualified plan adopted in October of 2008 authorizes 125,000 shares and 14,965,611was approved by a majority of our shareholders on September 16, 2009. As of March 31, 2019, 42,500 shares of common stock outstanding.have been granted under the 2008 plan.
INVESTVIEW, INC.
8. STOCK OPTIONSNOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2019 AND WARRANTS
Employee Stock Options2018
The following table summarizes the changes in employee stock options outstanding and the related prices for the shares of the Company’sour common stock issued to employees of the Company under two employee stock option plans.plans:
The nonqualified plan adopted in 2007 is for 65,000 shares of which 47,500 have been granted as of March 31, 2016. The qualified plan adopted in October of 2008 authorizing 125,000 shares was approved by a majority of the Shareholders on September 16, 2009. To date 42,500 shares have been granted under the 2008 plan as of March 31, 2016.
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2017 AND 2016
The following table summarizes the changes in options outstanding and the related prices for the shares of the Company’s common stock issued to employees of the Company:
| Weighted | ||||||||||||||||
| Weighted | Average | |||||||||||||||
| Average | Remaining | Aggregate | ||||||||||||||
| Number of | Exercise | Contractual | Intrinsic | |||||||||||||
| Shares | Price | Life (years) | Value | |||||||||||||
| Options outstanding at March 31, 2015 | 37,500 | $ | 10.20 | 4.33 | $ | - | ||||||||||
| Granted | - | $ | - | |||||||||||||
| Exercised | - | $ | - | |||||||||||||
| Canceled / expired | - | $ | - | |||||||||||||
| Options outstanding at March 31, 2016 | 37,500 | $ | 10.20 | 3.33 | $ | - | ||||||||||
| Granted | - | $ | - | |||||||||||||
| Exercised | - | $ | - | |||||||||||||
| Canceled / expired | (2,500 | ) | $ | - | ||||||||||||
| Options outstanding at March 31, 2017 | 35,000 | $ | 10.00 | 2.51 | $ | - | ||||||||||
| Options exercisable at March 31, 2017 | 35,000 | $ | 10.00 | 2.51 | $ | - | ||||||||||
| Weighted | ||||||||||||||||
| Weighted | Average | |||||||||||||||
| Average | Remaining | Aggregate | ||||||||||||||
| Number of | Exercise | Contractual | Intrinsic | |||||||||||||
| Shares | Price | Life (years) | Value | |||||||||||||
| Options outstanding at March 31, 2017 | 35,000 | $ | 10.00 | 2.51 | $ | - | ||||||||||
| Granted | - | $ | - | |||||||||||||
| Exercised | - | $ | - | |||||||||||||
| Canceled / expired | - | $ | - | |||||||||||||
| Options outstanding at March 31, 2018 | 35,000 | $ | 10.00 | 1.51 | $ | - | ||||||||||
| Granted | - | $ | - | |||||||||||||
| Exercised | - | $ | - | |||||||||||||
| Canceled / expired | - | $ | - | |||||||||||||
| Options outstanding at March 31, 2019 | 35,000 | $ | 10.00 | 0.51 | $ | - | ||||||||||
| Options exercisable at March 31, 2019 | 35,000 | $ | 10.00 | 0.51 | $ | - | ||||||||||
Stock-based compensation expense in connection with options granted to employees for the year ended March 31, 20172019 and 20162018, was $0.
Non-Employee Stock Options
The following table summarizes the changes in options outstanding and the related prices for the shares of the Company’s common stock issued to consultants and non-employees of the Company:
| Weighted | ||||||||||||||||
| Weighted | Average | |||||||||||||||
| Average | Remaining | Aggregate | ||||||||||||||
| Number of | Exercise | Contractual | Intrinsic | |||||||||||||
| Shares | Price | Life (years) | Value | |||||||||||||
| Options outstanding at March 31, 2015 | 2,500 | $ | 84.00 | 1.08 | $ | - | ||||||||||
| Granted | - | $ | - | |||||||||||||
| Exercised | - | $ | - | |||||||||||||
| Canceled / expired | - | $ | - | |||||||||||||
| Options outstanding at March 31, 2016 | 2,500 | $ | 84.00 | 0.08 | $ | - | ||||||||||
| Granted | - | $ | - | |||||||||||||
| Exercised | - | $ | - | |||||||||||||
| Canceled / expired | (2,500 | ) | $ | - | ||||||||||||
| Options outstanding at March 31, 2017 | - | $ | - | - | $ | - | ||||||||||
| Options exercisable at March 31, 2017 | - | $ | - | - | $ | - | ||||||||||
Warrants
The following table summarizes the warrants outstanding and the related prices for the shares of the Company’sour common stock as of March 31, 2017:2019:
| Warrants Outstanding | Warrants Exercisable | |||||||||||||||||||||
| Weighted | ||||||||||||||||||||||
| Average | Weighted | Weighted | ||||||||||||||||||||
| Remaining | Average | Average | ||||||||||||||||||||
| Exercise | Number | Contractual | Exercise | Number | Exercise | |||||||||||||||||
| Price | Outstanding | Life (Years) | Price | Exercisable | Price | |||||||||||||||||
| $ | 0.50 | 350,000 | 0.91 | $ | 0.50 | 350,000 | $ | 0.50 | ||||||||||||||
| $ | 1.50 | 6,127,497 | 2.24 | $ | 1.50 | 6,127,497 | $ | 1.50 | ||||||||||||||
| $ | 2.50 | 12,000 | 1.30 | $ | 2.50 | 12,000 | $ | 2.50 | ||||||||||||||
| $ | 6.00 | 45,313 | 0.83 | $ | 6.00 | 45,313 | $ | 6.00 | ||||||||||||||
| Total | 6,534,810 | 2.11 | $ | 1.48 | 6,534,810 | $ | 1.48 | |||||||||||||||
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2017 AND 2016
| Warrants Outstanding | Warrants Exercisable | |||||||||||||||||||||
| Weighted | ||||||||||||||||||||||
| Average | Weighted | Weighted | ||||||||||||||||||||
| Remaining | Average | Average | ||||||||||||||||||||
| Exercise | Number | Contractual | Exercise | Number | Exercise | |||||||||||||||||
| Price | Outstanding | Life (Years) | Price | Exercisable | Price | |||||||||||||||||
| $ | 1.50 | 5,052,497 | 0.36 | $ | 1.50 | 5,052,497 | $ | 1.50 | ||||||||||||||
Transactions involving the Company’sour warrant issuance are summarized as follows:
| Weighted | ||||||||
| Number of | Average | |||||||
| Shares | Exercise Price | |||||||
| Warrants outstanding at March 31, 2017 | 6,534,810 | $ | 1.48 | |||||
| Granted / restated | - | $ | - | |||||
| Canceled | - | $ | - | |||||
| Expired | (365,313 | ) | $ | (1.18 | ) | |||
| Warrants outstanding at March 31, 2018 | 6,169,497 | $ | 1.50 | |||||
| Granted | - | $ | - | |||||
| Canceled | - | $ | - | |||||
| Expired | (1,117,000 | ) | $ | (1.48 | ) | |||
| Warrants outstanding at March 31, 2019 | 5,052,497 | $ | 1.50 | |||||
| Average | ||||||||
| Number of | Price | |||||||
| Shares | Per Share | |||||||
| Warrants outstanding at March 31, 2015 | 6,298,771 | $ | 1.53 | |||||
| Granted / restated | 332,500 | $ | 0.50 | |||||
| Canceled | (126,461 | ) | $ | 1.50 | ||||
| Expired | - | $ | - | |||||
| Warrants outstanding at March 31, 2016 | 6,504,810 | $ | 1.48 | |||||
| Granted | 30,000 | $ | 0.50 | |||||
| Canceled | - | $ | - | |||||
| Expired | - | $ | - | |||||
| Warrants outstanding at March 31, 2017 | 6,534,810 | $ | 1.48 | |||||
NOTE 10 – COMMITMENTS AND CONTINGENCIES
9. DISCONTINUED OPERATIONS
Sale of Instilend Technologies, Inc.
On May 2, 2013, the Company, its wholly-owned subsidiary, Instilend Technologies Inc. ("Instilend") and Fortified Management Group, LLC ("Fortified") entered into an Asset Purchase Agreement (the "APA"), pursuant to which Instilend sold all of its assets, including its proprietary Matador, Locate Stock and LendEQS platforms, to Fortified in consideration of $3,000,000 (the "Purchase Price") consisting of 250,000 shares of common stock of the Company which were returned to the Company for cancellation in March of 2013, $2,500 per month commencing on the 90th day after the Closing Date which will be increased to $5,000 per month as of the 270th day following the Closing Date, a Secured Promissory Note in the principal amount of $1,250,000 (the "APA Note"), the assumption by Fortified from the Company of 5% Convertible Promissory Notes (the "Seller Notes") originally issued by the Company to Todd Tabacco, Derek Tabacco and Richard L'Insalata in the aggregate amount of $500,000 and additional monthly royalties of 5% after the payment of the $1,250,000 Secured Promissory Note up to $4,000,000 as set forth in Schedule 3 of the APA.
In addition, $150,000 of the Purchase Price (the "Escrow Funds") were used towards the payment by the Company of certain tax liabilities owed by Instilend. The Escrow Funds will be held in escrow until the Company has entered into settlement agreements with the relevant tax authorities, at which time the Company may authorize the Escrow Funds to be released for payment to the relevant tax authorities.Litigation
In the event of a failure by the Company to make any payments in accordance with the terms of any such settlement agreements, the Company will issue shares of its common stock to Fortified equal to three times the unpaid amount of the remaining unpaid tax liabilities.
As a result of the sale of the operating assets relating to the stock loan business, management of the Company, as of the Closing Date, elected to impair the remaining assets in the business including the goodwill, customer list and covenants to not compete. The impaired assets were initially recorded as a result of the acquisition of Instilend.
The assets and liabilities of the discontinued operations as of March 31, 2017 and 2016 were as follows:
| 2017 | 2016 | |||||||
| Total current assets of discontinued operations | $ | - | $ | - | ||||
| Accounts payable | $ | 120,266 | $ | 120,266 | ||||
| Total current liabilities of discontinued operations | $ | 120,266 | $ | 120,266 | ||||
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2017 AND 2016
Accounts payable are primarily comprised of vendors payable.
10. COMMITMENTS AND CONTINGENCIES
Litigation
The Company may be subject to legal proceedings and claims which arise in the ordinary course of its business. Although occasional adverse decisionsbusiness, we may be or settlements may occur, the Company believes that the final dispositionhave been involved in legal proceedings from time to time. Below is a description of such matters should not have a material adverse effect on its financial position, results of operations or liquidity.
The Company has received notice from the New York State Workers Compensation Board that a judgement was filed against themall legal proceedings we were involved in the amount of $13,000, along with total penalties of $29,034, however, effective July 5, 2017 the Company has confirmed a payment in the amount $4,350 will settle the amounts in full. Additionally, the Company’s wholly owned subsidiary, ITT, has received notice from the New York State Workers Compensation Board that a judgement was filed against them in the amount of $22,000, however, effective July 5, 2017 the Company has confirmed a payment in the amount $4,620 will settle the amounts in full. Accordingly, the Company has recorded $8,970 as an accrued liability and a selling, general and administrative expense as of, and during the year ended March 31, 2017.2019:
| ● | On November 1, 2017, we filed a lawsuit in the Fourth Judicial District Court for Utah County, State of Utah, Wealth Generators, LLC, v. Evan Cabral, Daniel Lopez, John Legarreta, Johnathan Lopez, Julian Kuschner, Nick Gomez, Luke Shulla, Nestor Velazquez, Christopher Terry, Isis De La Torre, Alex Morton, Ivan Briongos, Brandon Boyd, and International Markets Live Ltd. d/b/a iMarketslive, Civil No. 170401615, alleging corporate espionage and misappropriation of corporate information. The lawsuit alleges that International Markets Live Ltd., dba iMarketslive, conspired with a number of individuals affiliated with Wealth Generators to steal our confidential information, intellectual property, and trade secrets.On September 27, 2018, the court issued its ruling granting in part and denying in part our motion for preliminary injunction. On January 2, 2019, the parties entered into a settlement agreement in which they agreed to release all claims and have the litigation dismissed with prejudice, with neither party making any payment to the other, but with the defendants agreeing to make a $5,000 donation to charity. On February 22, 2019, the matter was dismissed with prejudice. |
11.INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2019 AND 2018
| ● | In February 2018, we received a subpoena from the United States Commodity Futures Trading Commission (“CFTC”). We complied with the terms of the subpoena, negotiated a resolution of this matter with the CFTC staff, and a final order was issued on September 14, 2018. Under the order, we did not admit or deny any of the allegations, agreed to pay a fine of $150,000, and agreed not to act as an unregistered Commodities Trading Advisor in the future. As of March 31, 2019, we have paid $90,000 to CFTC and the remaining unpaid balance has been included in accounts payable and accrued liabilities on our consolidated balance sheet. | |
| ● | Jim Westphal filed a wage claim against Kuvera, LLC (at the time named Wealth Generators, LLC), in the United States District Court for the District of Utah, Central Division (Case No. 2:18-cv-00080) in the amount of $6,500 plus liquidated damages. Mr. Westphal is claiming unpaid overtime wages. We contend that Mr. Westphal was an independent contractor, hired on a limited basis to perform software services, and is accordingly not entitled to overtime payments under the Fair Labor Standards Act. Moreover, Mr. Westphal never provided the promised software pursuant to the parties’ agreement. We filed a counterclaim on July 12, 2018, seeking damages of approximately $20,000 and demanding a jury trial. In December 2018, the parties settled the matter with a joint motion. As a result of the settlement, we paid Mr. Westphal $1,500 and the case was dismissed. | |
| ● | In April of 2019, we received a Summons and Complaint from Fibernet Corp making claims of unpaid invoices and breach of contracts entered into in February 2012 and January 2015 as RazorData Corp. Without admitting fault or liability, in June of 2019, we entered into an agreement with Fibernet Corp to settle all claims and release us from any future claims in exchange for a payment of $35,160 to avoid ongoing litigation related to this matter. |
NOTE 11 – INCOME TAXES
Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. The Company used an effective tax rate of 30% when calculating the deferred tax assets and liabilities and income tax provision below.
Net deferred tax assets consist of the following components as of March 31, 20172019 and 2016:2018:
| 2017 | 2016 | 2019 | 2018 | |||||||||||||
| Deferred tax assets: | ||||||||||||||||
| NOL carryover | $ | 18,372,400 | $ | 18,771,905 | $ | 2,363,900 | $ | 1,146,200 | ||||||||
| Related party accrued payroll | 2,200 | 203,373 | ||||||||||||||
| Deferred tax liabilities: | - | - | ||||||||||||||
| Amortization | 209,100 | 335,600 | ||||||||||||||
| Contingent Liability | 49,100 | 45,000 | ||||||||||||||
| Related party accruals | 1,500 | - | ||||||||||||||
| Deferred tax liabilities | ||||||||||||||||
| Depreciation | (1,200 | ) | (2,900 | ) | ||||||||||||
| Valuation allowance | (18,374,600 | ) | (18,975,278 | ) | (2,622,400 | ) | (1,523,900 | ) | ||||||||
| Total long-term deferred income tax assets | $ | - | $ | - | $ | - | $ | - | ||||||||
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2019 AND 2018
The income tax provision differs from the amount of income tax determined by applying the U.S. federal income tax rate to pretax income from continuing operations for the years ended March 31, 20172019 and 20162018, due to the following:
| 2017 | 2016 | |||||||
| Book income (loss) | $ | 754,100 | $ | (715,500 | ) | |||
| Non-cash interest expense | 387,400 | 175,100 | ||||||
| Stock for services | 239,800 | 31,600 | ||||||
| Gain on settlement – derivative and equity derived | (1,006,900 | ) | - | |||||
| Stock for payables | 278,000 | 3,400 | ||||||
| Gain on derivative liability | (36,200 | ) | (84,000 | ) | ||||
| Related party accruals | (220,600 | ) | 68,100 | |||||
| Amortization of prepaid expenses with stock | - | 41,200 | ||||||
| Fines and penalties | 3,900 | - | ||||||
| NOL utilization | (399,500 | ) | - | |||||
| Valuation allowance | - | 480,100 | ||||||
| Total long-term deferred income tax assets | $ | - | $ | - | ||||
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2017 AND 2016
| 2019 | 2018 | |||||||
| Book income (loss) | $ | (1,493,400 | ) | $ | (4,473,900 | ) | ||
| Stock for services | 32,800 | 2,048,200 | ||||||
| Gain on settlement – derivative and equity derived | - | 955,900 | ||||||
| Amortization | (33,100 | ) | 313,200 | |||||
| Contingent liability | (45,000 | ) | 45,000 | |||||
| Unrealized loss on cryptocurrency | (31,900 | ) | 40,700 | |||||
| Meals and entertainment | 12,400 | 6,200 | ||||||
| Non-cash interest expense | 315,800 | 5,700 | ||||||
| Depreciation | (7,200 | ) | (2,800 | ) | ||||
| Related party accruals | 1,500 | (1,500 | ) | |||||
| Related party accrued payroll | 174,600 | - | ||||||
| Gain on bargain purchase | (291,400 | ) | - | |||||
| Loss on value of derivative liabilities | 64,300 | - | ||||||
| Stock issued for loan fees | 21,000 | - | ||||||
| Amortization of prepaid paid for with equity | 45,100 | - | ||||||
| Valuation allowance | 1,234,500 | 1,063,300 | ||||||
| Total long-term deferred income tax assets | $ | - | $ | - | ||||
At March 31, 2017, the Company2019, we had net operating loss carryforwards of approximately $42,726,000$7,880,000 that may be offset against future taxable income for the year 20182020 through 2037. 2039. However, due to the change in ownership provisions of the Tax Reform Act of 1986, the NOL accumulated prior to the April 1, 2017, acquisition can only offset future income of up to $13,837 per year until expired. Should additional changes in ownership occur, net operating loss carryforwards in future years may be further limited.
No tax benefit from continuing or discontinued operations have been reported in the March 31, 20172019, consolidated financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.
Due to change in ownership provisions of the Tax Reform Act of 1986, net operation loss carryforwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carryforwards may be limited as to use in future years.
The Company compliesWe comply with the provisions of FASB ASC 740 in accounting for itsour uncertain tax positions. ASC 740 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740, the Companywe may recognize the tax benefit from an uncertain tax position only if it is more likely that not that the
tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The Company hasWe have determined that the Company haswe have no significant uncertain tax positions requiring recognition under ASC 740.
The Company recognizesWe recognize interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. The CompanyWe had no accruals for interest and tax penalties at March 31, 20162019 and 2015.2018.
The Company doesWe do not expect the amount of unrecognized tax benefits to materially change within the next twelve12 months.
The Company isWe are required to file income tax returns in the U.S. Federal jurisdiction, in New York State, New Jersey, and in Utah. The Company isWe are no longer subject to income tax examinations by tax authorities for tax years ending before March 31, 2013.2015. During the year ended March 31, 2019 and 2018 we paid income taxes of $70,768 and $24,589, respectively.
12. FAIR VALUE MEASUREMENTSNOTE 12 – SUBSEQUENT EVENTS
ASC 825-10 defines fair value as the price that would beIn April of 2019, we received proceeds of $200,000 from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 825-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825-10 establishes three levels of inputs that may be used to measure fair value:
To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement.two separate short-term promissory notes.
Upon adoptionIn June of ASC 825-10, there was no cumulative effect adjustment to beginning retained earnings and no impact on the consolidated financial statements.
The carrying value of the Company’s cash and cash equivalents, accounts receivable, accounts payable, short-term borrowings (including convertible notes payable), and other current assets and liabilities approximate fair value because of their short-term maturity.
Items recorded or measured at fair value on a recurring basis in the accompanying consolidated financial statements consisted of the following items as of March 31, 2017:
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2017 AND 2016
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Long-term investments | $ | - | $ | - | $ | - | $ | - | ||||||||
| Total | $ | - | $ | - | $ | - | $ | - | ||||||||
| Derivative liabilities | $ | - | $ | - | $ | 37,157 | $ | 37,157 | ||||||||
| Total | $ | - | $ | - | $ | 37,157 | $ | 37,157 | ||||||||
Items recorded or measured at fair value on a recurring basis in the accompanying consolidated financial statements consisted of the following items as of March 31, 2016:
| Total | $ | - | $ | - | $ | - | $ | - | ||||||||
| Derivative liabilities | $ | - | $ | - | $ | 258,808 | $ | 258,808 | ||||||||
| Total | $ | - | $ | - | $ | 258,808 | $ | 258,808 |
13. SUBSEQUENT EVENTS
Merger with Wealth Generators, LLC
Effective April 1, 2017, the Company entered into a Contribution Agreement with Wealth Generators, LLC (“Wealth Generators”), pursuant to which the Wealth Generators members agreed to contribute 100% of the outstanding securities of the Company in exchange for an aggregate of 1,358,670,942 shares of the Company’s common stock. Following the contribution, the Wealth Generators members control the majority of the Company’s outstanding common stock and Wealth Generators became a wholly owned subsidiary of the Company.
The transaction was accounted for as a reverse acquisition using the acquisition method of accounting in accordance with the FASB (ASC 805). Wealth Generators is the acquirer solely for financial accounting purposes. For purposes of the pro forma financial information contained below, Wealth Generators purchase price to acquire the Company was estimated based on an estimated value per share of the Company’s common stock of $0.0044. The allocation of the purchase price is preliminary and is dependent upon certain procedures that have not been finalized. The actual amounts recorded as of the completion of the transaction may differ materially from the information presented in the unaudited pro forma condensed combined financial statements. The unaudited pro forma condensed consolidated financial statements constitute forward-looking information and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated.
The historical financial information has been derived from the audited financial statements of Wealth Generators as filed on June 30, 2017 in the Company’s Form 8K-A and the audited financial statements of INVU. The financial information has been adjusted to give pro forma effect to events that are directly attributable to the reverse merger, are factually supportable and, in the case of the pro forma statements of operations, have a recurring impact. The pro forma adjustments are preliminary, is for informational purposes only, and the unaudited pro forma combined financial information is not necessarily indicative of the financial position or results of operations that may have actually occurred had the reverse merger taken place on the dates noted, or the future financial position or operating results of the combined company. The pro forma adjustments are based upon available information and assumptions that the Company believes are reasonable.
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2017 AND 2016
INVESTVIEW, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 2017
(Unaudited)
| Wealth | Investview, | Pro Forma | Pro Forma | ||||||||||||||
| Generators, LLC | Inc. | Adjustments | Consolidated | ||||||||||||||
| ASSETS | |||||||||||||||||
| Current assets: | |||||||||||||||||
| Cash and cash equivalents | $ | 1,616 | $ | 3,550 | $ | - | $ | 5,165 | |||||||||
| Receivables | 444,610 | 150,000 | (162,430 | ) | [1] | 432,179 | |||||||||||
| Short term advances | 10,000 | - | - | 10,000 | |||||||||||||
| Total current assets | 456,225 | 153,550 | (162,430 | ) | 447,344 | ||||||||||||
| Fixed assets, net | 10,235 | - | - | 10,235 | |||||||||||||
| Other assets: | |||||||||||||||||
| Deposits | 6,000 | - | - | 6,000 | |||||||||||||
| Goodwill | 1,118,609 | [3] | |||||||||||||||
| - | - | (1,118,609 | ) | [4] | - | ||||||||||||
| Total other assets | 6,000 | - | - | 6,000 | |||||||||||||
| Total assets | $ | 472,461 | $ | 153,550 | $ | (162,430 | ) | $ | 463,580 | ||||||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | |||||||||||||||||
| Current liabilities: | |||||||||||||||||
| Accounts payable and accrued liabilities | $ | 1,370,972 | $ | 417,025 | $ | (162,430 | ) | [1] | $ | 1,385,010 | |||||||
| (86,500 | ) | [2] | |||||||||||||||
| (154,057 | ) | [4] | |||||||||||||||
| Deferred revenue | 433,298 | 5,807 | (5,807 | ) | [4] | 433,298 | |||||||||||
| Related party payables | 805,895 | 132,199 | (5,000 | ) | [2] | 805,895 | |||||||||||
| (127,199 | ) | [4] | |||||||||||||||
| Settlement payable | - | 344,392 | (344,392 | ) | [2] | - | |||||||||||
| Debt | 2,093,745 | 73,011 | (46,696 | ) | [2] | 2,102,476 | |||||||||||
| (17,583 | ) | [4] | |||||||||||||||
| Current liabilities of discontinued operations | - | 120,266 | (120,266 | ) | [4] | - | |||||||||||
| Derivative liabiilty, short term portion | - | 37,157 | (37,157 | ) | [2] | (0 | ) | ||||||||||
| Total current liabilities | 4,703,909 | 1,129,857 | (1,107,088 | ) | 4,726,679 | ||||||||||||
| Long term liabilities | - | - | - | - | |||||||||||||
| Total liabilities | 4,703,909 | 1,129,857 | (1,107,088 | ) | 4,726,679 | ||||||||||||
| STOCKHOLDERS' DEFICIT | |||||||||||||||||
| Preferred stock | - | - | - | - | |||||||||||||
| Common stock | - | 125,889 | 24,576 | [2] | 1,509,136 | ||||||||||||
| 1,358,671 | [3] | ||||||||||||||||
| Additional paid in capital | - | 97,774,514 | 83,558 | [2] | (1,250,112 | ) | |||||||||||
| (99,108,184 | ) | [3] | |||||||||||||||
| Treasury stock | - | (8,589 | ) | - | (8,589 | ) | |||||||||||
| Members' deficit | (4,231,449 | ) | - | 4,231,449 | [5] | - | |||||||||||
| Accumulated deficit | 411,612 | [2] | |||||||||||||||
| 98,868,122 | [3] | ||||||||||||||||
| (693,697 | ) | [4] | |||||||||||||||
| - | (98,868,122 | ) | (4,231,449 | ) | [5] | (4,513,534 | ) | ||||||||||
| Total stockholders' deficit | (4,231,449 | ) | (976,307 | ) | 944,657 | (4,263,099 | ) | ||||||||||
| Total liabilities and stockholders' deficit | $ | 472,461 | $ | 153,550 | $ | (162,430 | ) | $ | 463,580 | ||||||||
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2017 AND 2016
INVESTVIEW, INC.
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED MARCH 31, 2017
(Unaudited)
| Wealth | Pro Forma | Pro Forma | |||||||||||||||
| Generators, LLC | Investview, Inc. | Adjustments | Consolidated | ||||||||||||||
| Revenue, net | $ | 12,872,947 | $ | 131,465 | $ | (131,465 | ) | [4] | $ | 12,872,947 | |||||||
| Operating costs and expenses: | |||||||||||||||||
| Cost of sales | 862,849 | 3,257 | (3,257 | ) | [4] | 862,849 | |||||||||||
| Commissions | 9,412,655 | - | - | 9,412,655 | |||||||||||||
| Selling and marketing | 500,032 | - | - | 500,032 | |||||||||||||
| Salary and related | 1,918,199 | - | - | 1,918,199 | |||||||||||||
| Professional fees | 917,308 | - | - | 917,308 | |||||||||||||
| General and administrative | 1,199,564 | 980,579 | (779,611 | ) | [4] | 1,400,532 | |||||||||||
| Total operating costs and expenses | 14,810,607 | 983,836 | (782,869 | ) | 15,011,575 | ||||||||||||
| Net loss from operations | (1,937,660 | ) | (852,371 | ) | 651,404 | (2,138,627 | ) | ||||||||||
| Other income (expense): | |||||||||||||||||
| Interest expense, related parties | (274,057 | ) | - | - | (274,057 | ) | |||||||||||
| Interest expense | (205,327 | ) | (648,573 | ) | - | (853,900 | ) | ||||||||||
| Other income (expense) | (6,120 | ) | - | - | (6,120 | ) | |||||||||||
| Gain (loss) on change in fair value of derivative liabilities | - | 84,284 | - | 84,284 | |||||||||||||
| Gain (loss) on debt extinguishment | - | 3,170,326 | 411,612 | [2] | 3,581,938 | ||||||||||||
| Total other income (expense) | (485,504 | ) | 2,606,038 | 411,612 | 2,532,145 | ||||||||||||
| Loss from operations before taxes | (2,423,164 | ) | 1,753,666 | 1,063,015 | 393,518 | ||||||||||||
| Tax expense | (4,039 | ) | - | - | (4,039 | ) | |||||||||||
| Net loss | $ | (2,427,203 | ) | $ | 1,753,666 | $ | 1,063,015 | $ | 389,479 | ||||||||
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2017 AND 2016
The fair value of the consideration effectively transferred was measured based on the fair value of INVU’s shares that were outstanding immediately before the transaction of 150,465,339. Using the closing market price of INVU’s shares on March 31, 2017 of $0.0044 consideration was valued at $662,047.
| Cash | $ | 3,550 | ||
| Receivables | 150,000 | |||
| Total assets acquired | 153,550 | |||
| Accounts payable and accrued liabilities | 456,599 | |||
| Due to former management | 127,199 | |||
| Debt | 26,314 | |||
| Total liabilities assumed | 610,112 | |||
| Net liabilities assumed | 456,562 | |||
| Consideration | 662,047 | |||
| Goodwill | $ | 1,118,609 |
Other agreements
As documented in elimination entry [2] above, in conjunction with the reverse acquisition with Wealth Generators, the Company2019, we entered into an assignment and assumptionoffice lease agreement wherein they issued 24,914,348 shares of their common stock to Alpha Pro Asset Management Group, LLC ("Alpha Pro"), an entity affiliated with the prior members of management,for our corporate finance department, located in exchange for Alpha Pro's assumption of $482,588 worth of liabilities. One of the notes assumed by Alpha Pro had a derivative liability recorded on the Company’s books for $31,157, therefore that liability was also extinguished with the execution of the agreement.
As documented in elimination entry [4] above, on June 6, 2017 the Company entered into an Acquisition Agreement with Market Trend Strategies, LLC ("Market"), a company whose members are also former members of management of the Company. In accordance with the Acquisition Agreement, the Company spun-off its operations that existed prior to the merger with Wealth Generators, LLC and sold the intangible assets used in the operations of the Company pre-merger in exchange for Market assuming $419,139 worth of liabilities that had been on the books pre-merger.
INVESTVIEW, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2017 AND 2016
Subsequent to March 31, 2017 the Company, through its wholly owned subsidiary, Wealth Generators, entered anEatontown, New Jersey. The agreement with a licensor of various productsis for a term of 15three years pursuantat a monthly rent amount of $2,500 for months one through six, $3,500 for months six through 12, and $4,000 for months 13 through 36. Corporate Finance is expected to whichoccupy the licensor agreed to waive its rights for future paymentsnew office space beginning in exchangeJuly of 80,000,0002019.
In May and June of 2019, we issued an aggregate of 39,215,648 shares of our common stock ofto Triton Funds LP under the Company, which may be increased an additional 20,000,000 shares of common stock if the products provide a returnpurchase agreement that was entered into in excessDecember 2018 and amended in March and April 2019, for net proceeds of 2% on invested capital for three consecutive months. The additional issuances shall not exceed 40,000,000 shares of common stock.$325,000.
DebtIn accordance with ASC Topic 855, Subsequent Events, we have evaluated subsequent events through the date of this filing and equity financing
Subsequent to March 31, 2017 the Company, through its wholly owned subsidiary, Wealth Generators, received short term advances of $800,000 and $25,000 from two separate lenders.
Subsequent to March 31, 2017 the Company, through its wholly owned subsidiary, Wealth Generators, entered into and closed a Subscription Agreement with an accredited investor pursuant to which the investor invested $30,000 in consideration of 3,000,000 shares of common stock, however, those shares have yet to be issued.determined that there are no additional subsequent events that require disclosure.
Conversions of debt
On March 21, 2017 Wealth Generators entered into a Conversion Agreement to extinguish a Revenue-based Funding Agreement in exchange for 10,000,000 shares of common stock upon Wealth Generators acquisition by a publicly traded company. Although the reverse acquisition with the Company took place effective April 1, 2017 the shares have not yet been issued to extinguish the $263,000 worth of debt.
On March 28, 2017 Wealth Generators entered into a Conversion Agreement to extinguish a Revenue-based Funding Agreement with a party related to Wealth Generators in exchange for 10,000,000 shares of common stock upon the Company’s acquisition by a publicly traded company plus monthly repayments of $15,000 for a period of 6 months. Although the reverse acquisition with the Company took place effective April 1, 2017 the shares have not yet been issued to extinguish the $90,000 worth of debt.
On June 6, 2017 the Company, through Wealth Generators, entered into a Conversion Agreement to convert $1,800,000 worth of debt into 180,000,000 shares of the Company’s stock, however, those shares have yet to be issued to extinguish the debt.